As a parent, the wellbeing of your children is undoubtedly the most important thing in your life. Taking out adequate life insurance for mums can ensure that if the worst were to happen, you could financially secure the future of your little ones.
Admittedly, a life insurance payout could never fill the emotional void of losing a mum. However, at least it could ensure that your loved ones remain in the family home, cover any outstanding debts and maintain their existing lifestyle. Despite this, there is still a large percentage of UK mums (61% according to Scottish Widows) who don’t have any life insurance cover.
We have spoken to the UK's largest life insurance broker, Reassured, to determine exactly why this is the case.
"It's too expensive"
It costs approximately £30-a-day raising a child (source: The Money Charity).
Accumulate this over the course of their childhood and the total amount quickly adds up, (£231,713 per child). Pair this with rising living costs and it is no wonder many families are having to tighten their purse strings. As a result, many mums see taking on another monthly expense as implausible. (Particularly something considered as unnecessary as life insurance).
But imagine if the worst were to happen and you were no longer around to support your family financially. Could your family afford to continue their existing lifestyle and maintain the mortgage repayments?
The average mortgage debt in the UK is £121,687, (source: The Money Charity).
Securing adequate life insurance puts protection in place to ensure this doesn’t happen and it doesn’t have to cost as much as you would think. In some instances, cover is available for as little as 20p-a-day.
"I'm a stay-at-home-mum"
For stay-at-home mums, the need for life insurance may seem even less essential – after all, your death wouldn’t mean the loss of any tangible income. However, your passing is highly likely to have an enormous practical impact on the family, which could then result in an added financial strain.
For example, childcare may be required to cover the duties you previously executed. Or your partner may have to reduce their working hours to pick up this additional childcare themselves. Both instances would affect the amount of household income by either increasing outgoings or decreasing income.
As a stay-at-home mum, life insurance ensures that if you were no longer around, these financial losses can be accounted for and the existing lifestyle of your family remain uninterrupted.
The average cost of full-time childcare is £232.84 a week, (source: The Money Advice Service).
"I'm a young mum"
Both amongst mums and the wider public, one of the most common reasons for not taking out adequate life insurance cover is due to being too young. When you are younger, you are less likely to have suffered medically and your life expectancy is at its peak, therefore negating the need for life insurance – or so it would seem.
Unfortunately, nothing in life is certain, therefore having life insurance cover in place even as a young mum, would mean you could support your child even if the unthinkable were to happen.
Equally, because of the likelihood of good health and optimum life expectancy, life insurance premiums are significantly cheaper the younger you are. Life cover can start for as little as £5-per-month for a 25-year-old, meaning the earlier you take out life insurance, the more savings you could make in the long run.
"I don't know what I need"
With so many options available it can be difficult to understand what type of cover you need, let alone how much you need to be covered for.
Here is a brief summary of the various different types of life insurance predominately used by mums;
- Level term life insurance - Provides a lump sum payout to your loved ones. The payout amount holds its value throughout the term of the policy. Ideal for covering a mortgage, as well as future living costs or providing an inheritance
- Decreased term life insurance - Provides a lump sum payout to your loved ones upon your death but the payout sum decreases over time. This is ideal for covering the remaining balance of a large debt, such as a repayment mortgage
- Family income benefit (or FIB) - Provides monthly payments to your loved ones of a predetermined amount to mimic the income of a lost salary.
The amount of cover you require will depend on what it is you are looking to protect and what you are looking to provide for upon your death. Speaking with an FCA registered broker will help you evaluate the available options, before making an informed decision on the most suitable policy for you and your family.
"I don't have time to arrange cover"
Tying into the point above, even if you do know the type and amount of cover you require, shopping around to get the best deal can be time consuming. As a busy mum, it's highly likely that this is time you simply don't have.
However, there is a solution - using a life insurance broker, like Reassured. We are able to compare the market on your behalf, identifying the best deals available to meet your unique requirements. And the best thing about our service, it is completely free to use!
No more excuses!
The reasons for not having life insurance cover are endless, but ultimately without cover you could risk burdening your loved ones after you are gone. Let's face it not many of us want to consider what might happen to our loved ones if we were no longer around.
The problem is you never know when you might need life insurance. Putting in place the right protection can ensure your family are able to remain in the family home and continue their current way of life.
What's more, it doesn’t have to be as expensive or confusing as you may think. If you don't have life insurance but have dependants, why not seize the day.
