Do You Need Life Insurance?
Life cover is vital for all parents. If either parent dies, the remaining
parent will not receive a great deal of financial assistance from the
state,If the father dies, a widow with one dependent child will receive
widow’s benefit and child benefit, which currently amounts to £91.55 per
week. Could you live on that?
If the mother dies, the only state funds a father is entitled to receive
is child benefit of £16.05 per week.
In practice this would go nowhere to providing childcare and running
a home.
Also, if you have any borrowings, capital will be needed to pay these
off as the debt still remains after the death of the borrower.
If you are pregnant you should consider taking out cover before you give
birth rather than wait until after your baby is born, as the financial
responsibility for the child begins straight away.
Remember also that children now have a high probability of going on to
further education, so you should make sure your cover goes beyond this
period so that you can still help out financially if the worst happens.
Critical illness cover is also a useful product to have as it pays out
on diagnosis of a major illness and would give the family financial assistance
while the parent recuperates. Make sure you get independent advice for
this as some companies include free cover for your children with an adult
policy.
Another common assumption is that if you have life cover on your mortgage
you have adequate cover. Admittedly you would have no mortgage to pay,
but what about all the other costs associated with modern living and raising
a young family?
So,
whether or not you both work you should certainly consider taking out
some kind of life cover to protect your family, should the unthinkable
happen.
