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Parent Life Insurance and why it’s so important

Being a parent is the most rewarding job you can ever have… but it’s also the hardest. You will do anything to protect your family and give yourself peace of mind if anything was to happen to you. The main thing that you can control is their financial protection.

As the kids start to go back to school for the new term this week, the past few days have probably been focused on making sure they have everything they need to get back in the classroom this September. Whether your children are starting school for the first time, returning after the summer break or are going to a new school, it’s a big day as you wave them off at the gates.

After six weeks of summer fun and adventures, it’s time to get back to reality new routines in your home life, work and school. It’s also the perfect time to make sure you have all your “life admin” in order.

At The Insurance Surgery, we’re the UK’s number 1 specialist life insurance broker for people with pre-existing medical conditions, dangerous occupations or hazardous hobbies.

Our knowledgeable team of experts can take all your details over the phone or via our online form. After having a chat with you, we can determine exactly what your life cover needs are, then apply to the providers we know will give you the premiums you need at the best price for your individual circumstances.

Our service is completely free of charge and saves you time. When you have a busy family life, it can be difficult to find the time to sit down and compare different insurance quotes, so we can do it all for you to find your perfect insurance company.

Finding life insurance as a parent


There are so many different reasons as to why people take out a life insurance policy. They may be influenced by their own parents or friends and feel the need to take out a policy because everyone around them has. It is often discussed when you’re purchasing a house, and a mortgage advisor or solicitor may ask if you have taken out any life insurance now that you are taking your first step onto the property ladder.

The most likely scenario is that you have become a parent, or are soon to be a parent.

It goes without saying that raising a child is incredibly expensive. We broke down the cost of a child in one of our recent blog posts about how to calculate how much life insurance you need. You can read more about how to calculate your life insurance policy here.

Your income and your partner’s income is very important, especially when you have a specific lifestyle. With a mortgage or rent to pay each month, plus bills and other lifestyle costs, it can be a balancing act to spread the cost payday to payday. When you throw in childcare costs and general costs for a child, it can all add up.

If you, or someone you rely on financially, were to pass away, it can take its toll. This is in addition to the emotional stress of dealing with a loss. Life insurance is a way of creating your own safety net so that you know your children will be taken care of should the worst happen.

Depending on your life insurance plan, your children’s needs can be covered with a lump sum payout.

This would cover things such as:

– A lump sum for your children’s future


This can be for anything that they need financially in the future. It could be to see them through university and the cost of moving away to study when they reach the age of 18.

It could also be saved for them to buy their own home when they’re ready to, or buy a car when they pass their driving test. It would mean they are looked after financially even if you are not around.

– Your mortgage and other outstanding debts


If you or your partner were to pass away, it could leave you financially unable to carry on paying for your mortgage. The lump sum left behind through life insurance would mean the mortgage could be paid off and your family can stay in the home they have grown up in so far.

– Educational costs


Even if you do not pay for a private education for your children, costs can rack up every year. You may have just experienced this first hand ready for the new school term.

Children grow very quickly year on year, so usually you need to replace the full uniform, PE kit and school shoes ready for the start of the school year. Uniform costs can vary from school to school depending on the uniform policy, but a lot of schools want children to wear school branded shirts, jumpers or blazers, which have a much higher price point than plain uniforms available in places like supermarkets. There are also lunch boxes, bags, shoes, stationary and books to buy each year.

As your children get older, moving out and going off to university is another huge financial impact. Although loans and grants are in place to support people with their dreams of getting a degree, you often need to kit your children out with everything they need to set up a home in the university halls.

It’s not just laptops, books and folders, but bedding, cutlery, crockery and pans are all on the list of necessities. A life insurance pay out can cover all of this so that they can still fly the nest and follow their dreams.

– Childcare costs


You may have noticed the financial impact this has had over the last few weeks during the school holidays. If your children are at school age, out of school clubs and childminders all have a hefty price tag. If your children are younger and haven’t started school yet, nurseries are also expensive even when you have the financial help towards them.

The lump sum can help to cover childcare costs so that you can go back to work when you are ready to.

– Every day costs


There is always something to buy or something that needs to be done and your shopping lists are probably never ending. An insurance payout can help you cover food, petrol, clothes, toys, activities and outings so you can make new memories with your children.

As with uniforms, a child’s wardrobe will never last as long as yours might. Often, they grow out of clothes before they’ve had hardly any wear out of them and things need replacing constantly.

You also have the wear and tear of being a child to contend with. No one scuffs a pair of trainers quite like an active child who loves playing outdoors. If you did find yourself in a position where your partner passes away and you no longer have that extra income, the lump sum payout will allow you to continue feeding and clothing your children with no worries.

– Yearly expenses


Birthdays, holidays, festive celebrations, religious celebrations, seasonal activities… they all seem to come around quickly don’t they? And each comes at their own expense. An insurance payout ensures that each of the traditions can carry on as normal without you having to worry about the money side of things.

Depending on your financial situation, taking out a life insurance policy is sometimes the only guaranteed way that you are left with or leave behind a lump sum to cover everything off.

If one parent dies who happens to be the main breadwinner, the last thing you want is to face financial struggles on top of the emotions that you face when someone you love leaves you.

What life insurance is best for parents?


If you don’t have a substantial knowledge of what is available to you when it comes to life insurance, there are two main types to choose from:

– Level term


This is the simplest type. You choose the payout value and how long the policy lasts.

If you’re looking for a way to know exactly how much your dependents will receive, a level term policy is probably something to look at.

The policy will pay out if you die within the term period you’ve chosen.

– Decreasing term


This is best for helping your dependents cover debts that lessen over time, such as a mortgage. It can also be known as ‘mortgage life insurance’ and the amount paid out depends on when you pass away.

If you were to die nearer the start of the policy, your next of kin would get a larger payout than if you were to die towards the end. This is because over that time, there will be less mortgage to pay off.

It can be cheaper than level term life insurance, but if you increase your borrowing the amount may not be enough.

What about Critical Illness cover?


You can get critical illness as an add on to your life insurance policy whether you choose a decreasing or level term policy. It is also possible to take out critical illness cover as a standalone policy.

Critical illness cover works differently to life insurance as it pays out a fixed amount if you are diagnosed with a serious illness and are unable to work.

Getting Critical illness cover can be difficult if you have a pre-existing medical condition, but this would depend on your personal circumstances.

If it is something you are looking to add to your policy, we can help. We recently talked a lot about critical illness cover and pre-existing conditions over on our blog, which you can read here.

If you buy critical illness cover as part of a decreasing or level term policy, it would pay out once lump sum and the policy would end. Your dependents would not then get another payout when you passed away.

However, if you got critical illness cover as a standalone cover, your critical illness policy would payout if you became ill and your separate life insurance policy would then pay out again if you were to die.

We can compare your options for you to see what would work best for you.

How much life insurance cover do I need?


As a parent, you have a lot more to think about than just yourself and your partner. With children depending on you, there is a lot of responsibility. You need to make sure that your life insurance policy reflects this.

You need to take into consideration your current lifestyle and finances as if you may pass away tomorrow.

Common outgoings include:

– Mortgage or rent payments
– Bills
– Child costs
– Lifestyle costs
– Cars or finance plans
– Loans and credit cards

As a rule of thumb, you’d want your life insurance payout to be roughly 10 times the value of your annual income.

We do have a handy life insurance calculator that you can use to work it out yourself, which you can find here. Our team of experts can also give you guidance with how much you should be looking at taking out.

How much does life insurance cost?


Life insurance costs vary from person to person as it takes into account lots of different aspects of your life. Things that affect the cost of life insurance include:

– The amount of cover you need
– The policy length and type
– Your age
– Your health
– Your lifestyle
– Your BMI
– Whether you smoke or not

Your life insurance will probably be cheaper if you can pay your premiums annually rather than every month, however that is not feasible for a lot of people. We can help you find a policy that you are comfortable with.

Should my partner and I get joint life insurance?


Again, this all depends on your lifestyles and personal circumstances. It could work out cheaper to have two separate life insurance policies in place rather than have a joint policy, but we can help you choose the right option for you.

If you’re a parent and looking to get your finances in order now that the children have gone back to school, The Insurance Surgery can help.

Fill in our online form today to get your application started, or call us on 0800 083 2829.