Life Insurance for Parents: Everything you need to know

As a parent, you understand the importance of protecting your family financially. You may not have considered buying life insurance, but it's a good option for protecting your loved ones in the event of tragedy.

Being a parent means that you make decisions every day with the well-being of your family in mind. However, what happens if something were to happen to you? How will your family cope financially? Taking out life insurance can be one way of protecting your loved ones in such an event.

From understanding cover types to comparing providers & costs, it pays for mums to shop around for the right policy. We'll explore the key aspects for parents looking to buy life cover, so you can make an informed decision when buying a policy.

What type of life insurance cover do parents need?

Term life insurance

For parents paying a mortgage, the most common type of cover is term life insurance. This type of policy pays out a lump sum if the policyholder dies during the term of the policy. The money can be used to help pay off outstanding mortgage debt, ensuring that your loved ones will not have to worry about it in the future.

There are 3 types of term life cover:

• Level term - This type of policy pays out the same amount regardless of when you die during the term. Your premiums for this kind of policy are fixed.
   
• Decreasing term - The policy is usually taken out alongside a large loan or mortgage. The payout decreases over time, in line with a mortgage or loan. Your premiums for this policy are fixed, but start off cheaper than level term life insurance.
   
• Increasing term - The payout increases over time, usually in line with inflation. This way, the payout your children receive won't lose value. This option is also referred to as indexation or index-liking. It’s important to note that you should expect your premiums to increase with inflation as well.

Please note: the insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.

Whole life insurance

Another option for parents is whole life insurance. This type of policy pays out a lump sum when you die, regardless of when that happens. It’s designed to provide financial security for your family if you die at any point in the future.

Whole-of-life policies tend to be more expensive than term life policies, but they offer greater peace of mind for the long term.

Please note: the insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit.

Joint life insurance

A joint life insurance policy is shared between two people - usually couples. It pays out a lump sum when one or both of the policyholders dies.

This type of policy can be useful for parents who are married or in a long-term relationship, as it can provide financial security for both partners and their children. It's often seen as a cheaper option when compared to taking out separate policies.

How much does life insurance cost?

The cost of life insurance cover varies depending on the type of policy you choose and the amount of cover you need. Generally speaking, term life policies tend to be cheaper than whole-of-life policies.

Other factors include:

• Age - Generally, the older you are, the more expensive the policy will be.
   
• Health - If you have any pre-existing medical conditions, this could affect the cost of your policy. 
   
• Smoking - Smokers tend to pay more for life insurance than non-smokers.
   
• Occupation - Your occupation can also affect the cost of your policy, as some jobs are seen as higher risk than others.
   
• Amount of cover - The more cover you need, the more expensive the policy will be.

It’s important to shop around and compare different policies to find the best deal for you. It's also a good idea to speak to an insurance broker, who can help you find the right policy for your needs.

How to apply for cover

Applying for life insurance cover through Cavendish Online is as easy as it gets.

If you’re happy to look into quotes without advice, you can simply to fill out our online application form and provide some personal information, such as your age, occupation and medical history. Once you've submitted your application, we'll show quotes from leading providers for you to compare in a matter of minutes.

Alternatively, you can apply with advice by speaking to one of our expert life insurance advisers. They'll help you find the right type of cover based on your circumstances and budget.