i have 2 children. should i get life cover?
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anthonyburgin
1 year ago
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
The question you are asking is "Do I have a need for life cover?" To get the answer, ask another question: what would happen to my dependents should I die? Would they have enough to live comfortably from other sources and, of course, how old are they now?
If they are still dependent on you financially, and if there are no other sources (such as wealthy parents, or plenty of your savings) then there is probably a need for some kind of life cover.
How much, and what type of cover, depends upon the duration of the need: for example, you might need maintenance funds until the youngest is, say, 21 and, with the current changes to university fees, you might also want then to be able to complete their studies without them having huge debts at the end.
If you are in an occupational pension scheme then that scheme might provide a high level of dependents' payments - so ask your scheme provider what they offer. Finally, do take into account the other major financial risk of your being unable to work due to a critical illness or long-term sickness - in such cases the family problems can be (financially) just a severe as if you had died. Cover is available for both of those potential problems, and, though rather pricey, suitable insurance is a real financial life-saver if you need to make a claim. This is an area where it is worth taking independent advice.
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If they are still dependent on you financially, and if there are no other sources (such as wealthy parents, or plenty of your savings) then there is probably a need for some kind of life cover.
How much, and what type of cover, depends upon the duration of the need: for example, you might need maintenance funds until the youngest is, say, 21 and, with the current changes to university fees, you might also want then to be able to complete their studies without them having huge debts at the end.
If you are in an occupational pension scheme then that scheme might provide a high level of dependents' payments - so ask your scheme provider what they offer. Finally, do take into account the other major financial risk of your being unable to work due to a critical illness or long-term sickness - in such cases the family problems can be (financially) just a severe as if you had died. Cover is available for both of those potential problems, and, though rather pricey, suitable insurance is a real financial life-saver if you need to make a claim. This is an area where it is worth taking independent advice.
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
....oh, and by the way, if you have a mortgage then you would, I am sure, want to enable them to stay there (or in another suitable place) so insuring your mortgage debt is another area of likely need.
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Expert Financial Adviser Answer
John Stirling
answered 1 year ago
Whilst Dr Carter makes eminent sense, and is correct in all he says, I'd like to add a little weight to the answer, so;
Hell Yes.
Unless you absolutely know there would be enough money floating around to look after them if you died tomorrow then it is your moral responsibility to provide for them. Assuming of course this isn't a trick question; your children do know you exist don't they?
The only situation which doesn't come under the above is if providing life cover would cost so much that it would prevent you from providing the basics for them now.
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Hell Yes.
Unless you absolutely know there would be enough money floating around to look after them if you died tomorrow then it is your moral responsibility to provide for them. Assuming of course this isn't a trick question; your children do know you exist don't they?
The only situation which doesn't come under the above is if providing life cover would cost so much that it would prevent you from providing the basics for them now.
Expert Financial Adviser Answer
Richard Salter
answered 1 year ago
Assuming the children are financially dependant upon you and that there is no adequate cover already in place - some employers will provide as much as four times your annual salary in the event of your premature death - then YES life assurance would seem eminently sensible.
Bear in mind that if you have young children then you are in turn likely to be relatively young so that premiums are likely to be modest - all the more so if you only take out cover until such children reach say 18 and could be regarded as relativley independent - even latch key kids! Thus as a minimum, on a tight budget, life cover should cost very little indeed.
Where there are other debts to be settled upon your death then boosting the basic amount of cover - and possibly the duration - to the planned end of your borrowing term makes sense. Indeed you should recognise that life cover, like anything else, has a basic cost of production and adminstration. Many life companies therefore charge a minimum of £5 a month for exampe to help cover their overheads. You are therfore likely to find that £50,000 of cover costs very little more than £10,000 of cover. Your age, health and smoker status will be the main factors in setting the insurance premiums you should expect to pay.
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Bear in mind that if you have young children then you are in turn likely to be relatively young so that premiums are likely to be modest - all the more so if you only take out cover until such children reach say 18 and could be regarded as relativley independent - even latch key kids! Thus as a minimum, on a tight budget, life cover should cost very little indeed.
Where there are other debts to be settled upon your death then boosting the basic amount of cover - and possibly the duration - to the planned end of your borrowing term makes sense. Indeed you should recognise that life cover, like anything else, has a basic cost of production and adminstration. Many life companies therefore charge a minimum of £5 a month for exampe to help cover their overheads. You are therfore likely to find that £50,000 of cover costs very little more than £10,000 of cover. Your age, health and smoker status will be the main factors in setting the insurance premiums you should expect to pay.