Bringing up children is rewarding. And expensive. That’s why life insurance is pretty important for parents. This kind of cover protects your surviving children (and partner, if you have one) financially, so they can keep paying for life’s essentials and maintain their lifestyle if you die.

From basic living expenses like the rent or mortgage, bills and food, through to childcare and even future university fees, life insurance means you can make sure the remaining members of your family have the means to give your children what they need.

Whether yours is a two-parent or single-parent household, your children are your financial dependents, so you should consider whether or not you need to get some life insurance in place. Our expert guide to life insurance for parents can help you work out the basics.

What is life insurance?

Life insurance is an insurance policy that pays out a tax-free lump sum to your surviving partner or children if you die. It provides the funds needed to support your children financially, in the absence of your income. It can ensure they're provided for until an age at which they can look after themselves – or even beyond, depending how much cover you want and can afford to buy.

How does it work?

Life insurance is an insurance policy that pays out a lump sum of money if you die. When you buy life cover you agree to pay a monthly amount in return for the lump sum, paid out after your death.

If you’re taking out life insurance to make sure your children would be provided for, you might choose to buy decreasing term life insurance, so the lump sum you'd receive goes down over time as their financial dependency decreases too. Or you also have the option of buying level term life insurance, if you want to make sure the amount you'd leave behind will always be the same. Read more in our guide to different types of life insurance.

Why is life insurance important for parents?

Naturally, children are financially reliant on their parents. If the worst happened, your partner or chosen guardian might not have the funds needed to adequately provide for them.

Life insurance can make sure they do – so you have peace of mind that life's essentials would always be covered for your children. You might even use it make sure their school or university fees are covered. And for extra peace of mind, life insurance can also cover more than essentials – like hobbies, and holidays – so your children's lifestyle wouldn't need to change just because you're not there.

What's the value in having life insurance?

For parents, life insurance is peace of mind. It's designed to make sure your children will be financially secure and taken care of if you (and your income) are no longer around. Grief is difficult enough – but life insurance takes away any additional financial burdens your family might otherwise face. Whether you’re in a two-parent or single-parent household, it can cover any shortfall.

When's the best time to buy life insurance?

The younger and healthier you are, the cheaper life insurance is. And it's a good idea to get cover in place as soon as you become a parent – because your financial liabilities change at that very moment. You can always revisit the level of cover you have in place if your situation changes, or you have more children in the future. Especially as more children means greater financial liabilities.

Got kids? Let's work out what life insurance you need, starting with your age:
  • Children are naturally financially dependent on their parents
  • If you died, you’d want to know your children would be provided for until they reach an age where they can look after themselves
  • In a two-parent household, outgoings are usually based on the money coming in – so if one parent dies, the rest of the family could struggle financially
  • In a single-parent household, you might be the main or only provider for your children, so without you they'd have no financial support
  • Life insurance protects your surviving children and/or partner financially, so they can keep covering the essentials and maintain their lifestyle if you die
What is life insurance?
An insurance policy that pays out a tax-free lump sum to your partner or family if you die. It’s designed to make sure your loved ones would be financially secure without you and your income.
Who needs life insurance?
Anyone who has financial dependents. In other words: other people who rely on your income. If you have a partner or children who’d be financially affected by you dying, you should consider having some life insurance in place.
How much does life insurance cost?
Life insurance is often very affordable, but the cost differs per person. This is because it depends on the cover you buy and how much of a risk you are to insure (based on your age, health and lifestyle). It’s cheapest when you’re young, fit and healthy.
Does life insurance always pay out?
Life insurance will pay out if you die while you’re insured and you were honest about your health when you applied. It won’t pay out if you die after your policy runs out or you cancel your policy – and might not if you meet an exclusion (e.g. many insurers exclude death by suicide within the first year of taking out the policy).
Is it easy to claim?
Claiming on a life insurance policy is straightforward – your partner or family simply claim directly with your insurance company. Making sure they know about your policy and have the details in case the worst happens can be helpful.