If you are about to become a parent for the first time, or you have already started your family, you may be thinking about how best to protect your children and your whole family with insurance.

What type of insurance will you need and how much will it cost? 

Family protection can provide a benefit when things are tough, such as if one parent dies or becomes ill. 

Beyond the emotional impact, how will your family manage financially and pay for essentials such as regular bills, your mortgage, healthcare expenses, or for the children’s education?

Insurance for Parents

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How your family circumstances affect the protection you need

Although you never stop being a parent, here we are looking specifically at parents with children up to the age of young adulthood (ie. 18- 25) who may have different insurance needs to parents who have older families. 

Your children may not be financially independent until they are in their mid twenties so you will need to consider financial protection until all of your children reach this age at least.

Types of insurance that parents need

The following types of protection will alleviate the financial impact of an illness or death in the family and provide peace of mind for parents:

Life insurance for parents

Life insurance may never have been a priority for you before you became a parent but part of the responsibility that comes with being a parent is preparing for the unexpected. 

Life insurance provides a cash lump sum that could replace your or your partner’s income if one or both of you dies while your children are still financially dependent on your income. You can choose between life insurance that provides cover for a set time period (term life insurance) or that provides cover until you die (whole of life insurance).

Think about everything that your income provides for and imagine how your family would do without these necessities should you no longer be around.

Even if one parent stays at home with your children, you would need life insurance to cover the additional costs of childcare provided by that parent. 

Being a widowed parent brings a financial toll as well as an emotional one and the lump sum provided by life insurance would ease this burden for the surviving parent.

Dual life insurance offers a higher level of protection than single life or joint life insurance and will protect both parents and will pay out twice if both parents die during the term of the policy.

Single life insurance will pay a benefit on the death of the policyholder and joint life insurance will cover the lives of both parents but will only pay a benefit on the death of the first parent. Imagine a scenario where the surviving parent were to die, how would expenses such as your children’s education be provided for?

It is also worth considering a conversion option, or a guaranteed insurability option, if you are purchasing life insurance for the first time when your family is young.

With this additional benefit, you will be able to increase your cover, or convert your policy into a whole of life policy when you are older and life insurance premiums are more expensive based on your health when you first purchased the life insurance policy.

You can also increase your cover as your family grows such as when you and your spouse add to your family by birth or adoption, you move house or remortgage your current home, or you get a new job or promotion at work.

life insurance cover

Specified illness insurance

Specified illness cover can be purchased as an additional option when you purchase a life insurance policy or as a separate standalone policy. It may be more cost effective to buy alongside a life insurance policy and is a useful benefit to consider when you become a parent.

Specified illness cover pays a tax free cash lump sum if you are diagnosed with a serious illness during the term of the policy. You can use this sum in a way that suits you and your family.

You can also purchase joint specified illness cover to cover you and your spouse so that if either is ill, you will receive a benefit.

This is a valuable safety net if you are ill and can be used to pay medical bills, to replace lost income, or to provide necessities such as childcare or accommodation and transport when you are receiving treatment.

Serious illness of a parent can have a serious financial impact on a family’s finances on top of the physical pain and suffering, stress and worry that illness brings. Specified illness cover brings some financial security so that will bring you peace of mind while you recover and receive treatment for your illness.

Your insurer will provide a list of serious illnesses and conditions that are covered for either full or partial payment when you purchase your policy and these can vary by insurer.

financial protection when you receive a specific diagnosis

Income protection for parents

How would your family fare if you were ill or injured and were unable to work? As a parent, your income provides for your family’s needs such as the roof over your heads, bills, the family car, your children’s education and healthcare needs, and your family lifestyle. This applies even more so if you are parenting alone.

Income protection is a form of financial protection that is intended to replace your lost income if you were unable to work in the medium to long term.

There are State supports for those who cannot work, however these are not sufficient for most family’s needs and may not pay for your family’s regular outgoings.

Income protection insurance will pay a monthly benefit of up to 75% of your salary if you are unable to work for a time. 

The deferred period in your policy is an initial time period before you receive benefit and this can be 4 weeks to a year. So if you are out of work for longer than the deferred period, you will receive the benefit to cover your family’s essentials.

You can choose your income protection term to coincide with your planned retirement or until such a time as your children are older and do not rely so much on your monthly income.

Income protection could potentially pay a benefit for the remainder of the policy term if you are unable to return to work meaning that you could secure your children’s futures even if you remained ill or injured long term.

Who offers income protection insurance in Ireland

Children’s life and specified illness cover

No parent wants to think about needing life insurance or serious illness protection for their child. However, many life insurance and specified illness insurance products do offer a reduced level of protection for children as part of the policy benefits.

If your child is seriously ill, their health will naturally be your first priority but a child’s serious illness can have financial repercussions for the whole family.

Parents may find that they cannot work, or have to reduce their hours at work to care for a sick child and the financial protection of a specified illness policy could help to pay for the expenses that you incur at this time.

Contact Us

Parenthood brings new delights, challenges, and responsibilities and you can protect your family now and in the future with life insurance, specified illness cover, and income protection.

Our insurance specialists can discuss your needs with you and advise you on insurance cover suitable for your family circumstances.

Call us today or fill in our online assessment and you can discuss family protection with a qualified insurance advisor for the best insurance products for you at affordable premiums.

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