Best Life Insurance for Dads

Best Life Insurance for Dads

I wrote a blog on Life Insurance for mums a little while ago and didn’t plan for it to take so long to get the dads version out. I’ve been delayed by the ghastly cold that seems to have taken over the UK in the last month.

So here it is, the best life insurance for dads.

Life insurance does what you expect it to, it pays out money if you die.

Life insurance is one of the simplest insurances that can be arranged. Your circumstances might make it more complex to figure out what you need, but the product itself is pretty straightforward.

When you have children it’s quite normal to be concerned about their future. One of the biggest concerns can be what would happen to your child when they’re young, if you pass away. You have likely thought about who will raise them and fill a kind of parent role if you die. People often have this kind of information in a will, to make sure that their children are looked after by people that they trust.

Another area to look at is the financial costs of raising your child. You probably want to know that there will be enough money for your child to eat well, to live in a warm home, continue to take part in their out of school clubs, and maybe help towards university fees or buying their first home. This is where life insurance comes in.

Let’s take a look at some of the best life insurances for you.

Types of Life Insurance

Life insurance comes in many different shapes and sizes. Life insurance policies are picked based upon your specific needs, it’s not just how much life insurance you want and how long for, it’s also how it potentially changes over time.

• Level life insurance – this life insurance stays the same however long it lasts. So £150k life insurance set up now will still be £150k in 10 years, 15 years, 20 years time.
• Increasing life insurance – this life insurance increases over time and it does this to counteract inflation. The thinking is that £150k now, won’t have the same value in 20 years time, due to changes in the economy. The life insurance increases each year to retain it’s value, the premiums also increase too to support the higher amount of cover.
• Family income benefit – this life insurance gives your family a sum of money each year to live on. You often arrange for this to match your essential outgoings, nett salary or gross salary. As an example, instead of arranging a lump sum of £150k to payout if you die, you arrange for your family to receive £25k every year until the policy ends.

There is also decreasing life insurance but you would not usually arrange this for family protection. Decreasing life insurance does what you expect, the value of it reduces over time and it is usually used to cover capital and repayment mortgage liabilities.

Family income benefit is a kind of decreasing policy, but it’s often not thought of that way. Here’s a very quick example. Let’s say you insure yourself for £15k every year over 10 years. The insurance starts with a value of £150k then once it has been in a place a year it will drop to £135k, in year two it drops to £120k, and so on.

It’s completely up to you as to which type of life insurance suits you best. By speaking with an adviser like us we can help you to determine which life insurance matches your goals and find you the most cost effective way of getting it.

Which Insurer is Best?

When it comes to life insurance there is no specific insurer that is the ultimate best in the UK. Life insurance is life insurance, there are sometimes a couple of differences that you might want to consider, but overall they pretty much do the same thing.

Your age, smoker status, occupation, travel, health and lifestyle and family medical history, all influence who is going to give you the best life insurance.

Some insurers do have unique parts to their life insurance that are worth knowing about:

• Aviva – have an extra that you can pay for that is called Global Treatment. This extra means that if you a diagnosed with certain conditions and the best treatment for you is abroad, they will pay for your travel, accommodation, treatment and bring you home.
• Guardian – offer the best definition of terminal illness available in the UK. Terminal illness is a part of life insurance policies and Guardian have an option that will pay a claim if you are told you have stage 4 incurable cancer, regardless of how long the doctors say you have left to live. Other insurers will want confirmation that you have less than 12 months left to live, to claim on terminal illness cover. You can also bolt on children’s critical illness cover.
• VitalityLife – you can bolt on children’s critical illness cover. VitalityLife also give you the chance to reduce your premiums over time, if you regularly exercise and record your fitness with them.
• Zurich – have a paid for extra called Accelerate that offers lots of support if you are diagnosed with certain conditions, to take you abroad for treatment if the best treatment is outside of the UK. Travel, accommodation, treatment costs abroad and when you get back home are covered. They also offer specific genome sequencing if you are diagnosed with cancer, so that your treatment is targeted in the best way possible.

These are some of the ways that insurers take steps to make their life insurance stand out compared to others. Ultimately if you don’t get all these fancy extras don’t worry, they are nice to have but not essential. It is definitely worth checking the price of the cheapest life insurer for you and compare them to another insurer offering these kinds of extras. It’s often not as big a difference as you think!

How Much Does it Cost?

There are a lot of things that determine the cost of your life insurance. The amount of cover you want and how long you want it to last for, at the main factors. You height, weight, smoker status, health, travel, occupation and more, all play a part in the price that you will pay.

A lot of the time people have a random number in their head as to how much life insurance they want. It’s fine to look at this as a starting point, but it’s also worth taking some advice on the right amount of life insurance for you. We would usually suggest looking at a lump sum life insurance of 3-5x your annual gross salary, as a good amount to provide financial security for your children.  

With family income benefit it is quite common to look at insuring your nett salary until your children reach an age of independence. People have different ideas as to when their child will be independent with the ages of 18, 21 and 25 typically chosen. 

Here are some quotations based upon a 32 year old dad who is a non smoker, he is a Software Engineer and earns £42,000 a year. He has two children that are currently 7 and 4 years old.

• Level term life insurance – £210,000 (5x salary) life insurance over 21 years costs £8.22 per month.
• Increasing life insurance – £210,000 life insurance over 21 years costs £8.22 per month. 
• Increasing family income benefit – £34,000 per annum for 21 years costs £14.02 per month.

These are just a couple of examples that show the potential pricing for your life insurance.

Our award winning advisers arrange life insurance for mums every day. We even have specific insurances that can give you financial support if your child breaks a bone, is diagnosed with diabetes, blindness, deafness, or many other things that none of us every want to think about, but can happen.

Get in touch with us for a no obligation quotation today.

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