Back to School and there are lots of things to consider, but here is one you may have overlooked….Have you thought about taking out life insurance on your child?
Most parents don’t. After all, why would they - if the worst happened, no amount of money could ever help come to terms with the loss.
This issue, somewhat clouded by emotion, is clearly overlooked by the majority of parents. Roughly 20% of the population are currently under the age of 18, so why don’t we insure our children in the same way that we do ourselves or our belongings? Have you ever considered what would happen if the worst were to actually happen?
Things you need to consider: Time off from work - currently the law stipulates that all employees are entitled to 'time off for dependants - a reasonable amount of unpaid leave to deal with unforeseen matters and emergencies.’ But what is considered ‘reasonable’ is at the discretion of your employer and, realistically, how long could you afford to go without pay? In this situation, it is perfectly ‘reasonable’ to expect little or no work to be done before or after the bereavement which, depending on your contract (and the goodwill of your employer) could have a huge impact on your finances. There was a candid and very brave article published in the New York Times last year, written by a bereaved mother, who gave some insight into the emotions and difficulties she faced after losing her teenager “Following my daughter’s death, there were times when I left my house that I could barely breathe. My pain and grief were reflected in the faces of my friends. In the presence of others I teetered on the brink of being overwhelmed. Where once I had enjoyed shopping and running errands, these activities now jeopardized my fragile attempt to hold myself together. Home was the only safe place.” Another grieving parent commented that following her daughter’s death “my body seemed to tell me that I had died, too. I had lost those primordial survival cues that tell us to eat, to drink, to sleep and keep warm. Oblivious to the passing of time, I confused early morning with evening and would find that completing even basic tasks required a Herculean effort.” Clearly, this is not a time when you could contemplate a return to work, or field calls from finance companies chasing missed payments.
On another practical level, final expenses may well go into the thousands. The average cost of a funeral rose by 80 per cent between 2005 and 2015, and this trend is expected to continue. The cost of dying – including funeral, burial or cremation and state administration – rose by 7.1 per cent in the last year alone and can now easily exceed £5,000. Is this a cost you could absorb? Every parent wants the best for their child – even in death – which includes the knowledge that their final resting place is what everyone would have wanted, without being dogged by the issue of how much?
You, your partner, or surviving siblings may well need some form of therapy to help work your way through your emotions, and whilst the NHS will do what it can, what it can offer is limited and often with a very long waiting list. Or it could just be that you will need some kind of everyday help in the home, until you are able to contemplate how (and why) you will find the resources to carry on. The time will never be right for such a devastating experience, but what if there are infants in the home, or teenagers taking exams? Their needs must still be met and it may be that you need some hired help to do the practical stuff.
There are some long term benefits to insuring your child from birth (or when they are very young). Once you start your son or daughter’s policy, they are locked into ‘future insurability’, regardless of any changes in their own medical conditions, or that of close family members - the type that often affects policy and premiums when purchased as an adult – like heart disease in grandparents, parents etc.
Perhaps the more ‘palatable’ (and possibly economically sound) way to insure your child is to go for a tax exempt savings plan with life assurance included. All of these issues should be discussed with your broker as there are a variety of options available to you.
But, clearly, the issue is not whether a parent would ‘benefit’ from such a plan – surely the question is, and should be, how would you manage without one?