Whether you are a parent or not, life insurance is something you should always consider. In my time I’ve seen so much suffering from families losing one of their own and not knowing how to cope both emotionally and financially. Life insurance for parents can help ease the financial pain that death causes, and we have to be honest here, it does cause pain.
We plan financially for our holidays, for Christmas and birthdays but we do sometimes put off financial planning for our death. But, there is nothing wrong or morbid about planning for what happens after we die.
Here are a few things to think about when sorting out your insurance plans.
- Decide whether to arrange a lump sum payment or regular monthly payments
- Think about the things that the money will need to cover, will your dependents need to pay rent and mortgage still?
- Will your payments affect means tested benefits of your family members.
- How much can you afford to pay towards your insurance plans every month/year
You need life insurance if you have dependants, a partner that relies on your income or a mortgage that you pay towards. A life insurance policy can provide for them if you die.
Types of Insurance
There are different types of insurance policies available and you should consider them carefully. Maybe you can take out more than one.
There are two main types of policies. A Term Life Policy which will pay out if you die in the fixed term stated such as 10 or 25 years. There is no payout if you are still alive at the end of the policy. A whole life policy will payout when you die so long as you keep up with the premium payments. These are generally smaller payments but can be paid for a very long time and are generally a fixed sum so you may end up paying in more than is paid out when you die.
You can also take out a policy which will pay out a lump sum if you die, but also give you a pay out after a fixed term. For example you could pay in for 10 years and if you die your family gets a fixed sum agreed when you start the policy. If you don’t die then they pay you back what you have paid in.
You may also wish to have a separate funeral plan which will give your family enough money to pay for your funeral.
How Much Do You Need to Pay for Life Insurance
When taking out an insurance policy the payment depends on your personal situation.
- your age
- your health
- your lifestyle
- whether you smoke
- the length of the policy
You also need to take into consideration how much money you want your relatives to receive from your policy. It’s a good idea to shop around and find the best deal for you.
This is a collaborative post, you can read my disclosure policy here.