As a parent, you want to ensure that your child has a stable future. But have you considered how you would financially provide for them in the event of your death.
A Term life policy could be the solution you need to secure your child’s future. It’s a valuable tool for parents who want to ensure their child’s future is financially protected. We’ll look at just some ways it can support your loved ones.
What is term life insurance?
Term life insurance is a type of life insurance that provides cover for a specific period of time, typically 10, 20, or 30 years. It offers a death benefit that can provide financial support for your child if something were to happen to you.
It’s perfect for families looking for limited cover. However, if you outlive the policy, there’s no return of premium.
There are 3 types of term life cover to choose from:
- Level Term: provides a fixed death benefit for the duration of the policy. The premium is guaranteed to stay the same throughout the term.
- Decreasing Term: often used as mortgage protection. The death benefit decreases over time as you make repayments.
- Increasing Term: suitable for those who want to ensure that their child’s future is protected. The death benefit increases over time, reflecting inflation and increasing costs of living.
Here are a few reasons term life insurance can be a valuable component of your child’s future planning:
The cost of education continues to rise, and providing your child with a quality education can be a significant financial burden. Term life insurance can help cover the cost of tuition, books, and other educational expenses, ensuring that your child can pursue their dreams.
By having life insurance, you can provide your child with financial security, even if you were to pass away. The death benefit from the policy can cover living expenses, mortgage payments, and other financial obligations, allowing your family to maintain a stable and secure lifestyle.
If you have outstanding debts, such as a mortgage or car loan, your spouse may become responsible for these obligations. This could be money that would otherwise be spent on your children.
Term policies can help ensure that your family is not burdened with these debts and can maintain their financial independence. Instead, money can be spent on your child’s future.
Leaving a legacy
Every parent wants to see their children get the most out of life. Life insurance can help you leave a financial legacy for your child. Allowing them to pursue the life that they want without worrying about money.
By planning, you can provide your child with the financial security they need to thrive and reach their goals. Make sure to talk to an insurance agent about what type of policy is right for you and your family.
Do I need term or whole life insurance?
This is always one of the biggest questions when it comes to buying life cover. Although they sound similar there are some significant differences between the two.
Unlike term life insurance – which lasts for a set period of time, whole life cover lasts for a lifetime. Therefore if you’re looking for long-term protection for your family, then a whole-life policy could be the right choice.
Another difference is cost. As whole life cover is permanent it typically incurs higher premiums. However, other factors can affect premium costs, including your age, health, occupation and the amount of cover needed.
The decision between the two types of policy can be complex, so it’s important to speak with a qualified insurance agent to determine what type of cover is most suitable for your family’s needs.
How can I save money on life insurance?
Despite popular belief, life insurance doesn’t have to be expensive. There are many ways to save money on your policy, including:
- Shop around: Comparison shop different insurers and policies to see which one offers you the best cover for the lowest price.
- Choose the right coverage: Make sure you’re getting the right amount of coverage and only paying for what you need. You don’t want to be over or underinsured.
- Apply early: Premiums can be cheaper the earlier you apply, so don’t wait until you’re older or in poor health to buy a policy.
- Think about joint cover: If you’re married, consider taking out a joint life insurance policy. This can often be cheaper than two separate policies. It also means the surviving spouse can support their children if the other dies.
- If you smoke – stop: Smokers typically pay significantly more for life insurance than non-smokers, so quitting could save you a lot of money.
By taking the time to research your options and shop around, you can find a policy that fits your budget and provides the protection your family needs.