Why families should consider life insurance

Life insurance is sometimes overlooked as an essential product as people tend to focus more on pensions and savings. This is because many people do not realise the importance of life insurance and why it is needed.

Research shows that single parent families and families with unmarried parents are amongst groups that are less likely to have financial protection in the event of death or serious illness. According to research, less than a third of households with single parent families, unmarried partners and same-sex couples are covered through life insurance.

One of the main reasons why families might want to consider taking out life insurance is to protect their youngsters financially in the event of death or a serious illness. A life insurance pay out could offer financial stability for any dependants there may be.

It’s not just parents with young children who should consider life insurance to be an essential financial product.

Studies show that over 4.4 million UK adults rely on their parents for financial support. Whilst you might think that parents only help their grown-up children with weddings or to get onto the property ladder, research from insurance firm LV suggests that parents are still helping their grown up children with basic living costs.

A growing number of over 21 year olds are looking to parents to help with everyday living costs. This sets parents back an average of £2,103 a year. Today parents don’t actually expect their children to be financially independent until they reach the tender age of 38.

With a growing number of parents expecting to keep funding their children until their much older, taking out life insurance is more important now than ever.

Research shows that parents spend an average of £175 a month on each ‘grown-up’ child, as well as contributing towards further education fees, weddings and deposits on first homes.

As well as their children, parents may also become responsible for their elderly parents as they will need care and financial support.  The cost of elderly care can be expensive and older generations can leave their adult children to pay the bill. Research suggests that more than half of over 75-year olds would prefer to have care services in their own home rather than go into residential care home.

Interestingly, almost 10% of 75 -85 year olds plan to live with their children if they’re unable to cope in their own properties, however, 49% don’t want their children to care for them.

Post courtesy of Money Expert.