How To Be A Responsible Parent When It Comes To Life Insurance For Young Adults And Children in Sydney
Being a parent is a tough job. From your child’s first after-school lessons, to helping with university applications, you’ve done everything you can to help your children succeed…almost. Unfortunately, one of the most important ways you can provide security for your children and protect your own financial stability is often overlooked: Life insurance.
You’ve probably thought about Life insurance for yourself. After all, you want to do your best to make sure that your family will be provided for if you are ever severely injured, permanently disabled, or die. What you might have overlooked, according to Adam Wesek (Senior adviser at Fairbridge), is child cover for your children.
Life Insurance for Young Adults and Children in Sydney – Is it really necessary?
We all hope we’ll outlive our children. The idea that they may become terminally ill, or die before we do is a painful one. That’s not only what Life insurance for children and young adults is about. Locking in lower premiums and safeguarding against future uninsurability are just two reasons to consider buying Life insurance for your children. Life insurance coverage for children is also about securing a better financial future for your children and yourself.
There are several ways you can prepare your children for obstacles they may face later in life. In particular, you can make them aware of the need for a good Life insurance policy. It may seem trivial, but your child’s Life insurance (or lack of) can have a significant impact on their finances, and yours.
Here are 4 points to consider when thinking about insurance cover for your children:
Protecting Their Insurability
- When your children are at least 2 years-old and haven’t yet turned 18 (or 21, depending on your policy), Child Cover is something to definitely consider. As a part of your policy, it covers your children for trauma and death.
- When your children are a bit older and in the workforce (and perhaps with their own young families) this is an important time to consider Income Protection, Trauma cover, Total and Permanent Disability cover, and Life cover. If these protections are not in place who would your children and their young families look to for support? If your child is unable afford the premium themselves, you, as a parent, may want to cover your children’s costs until they are able to take these over.
The cost of the premium borne by you as a parent is significantly less than the potential costs of having no coverage in place and having to support a child (or their family) financially in the event of a tragedy.
Could you afford to care full-time for your child? Their young family? What if your child contracted a major illness, became disabled or passed away? How much money is in your retirement fund? Would you be able to continue to focus on your own finances if you faced these scenarios? Or, would it be easier to already have a plan in place that you can rely on?
You don’t want to imagine your children getting sick, dealing with injuries, or dying. No one does. It’s a parent’s worst nightmare. But, being afraid of something doesn’t prevent it. The smartest strategy to protect for your children’s future and your financial security is to be prepared in case you do face one of these scenarios.
Providing the best levels of care for your children
Having insurance cover already in place can help ensure that you are able to provide the right levels of care for your child should they fall ill. Having a lump sum cover for instance, may allow you to take time off work to be with your child and ensure that you are able to find and afford the best treatments possible to give them the best chance of recovery.
Looking Out for Yourself
Self-interest isn’t something most of us want to admit, but there are some major reasons to consider life insurance for your children in order to protect yourself. Think about it. Who do your children turn to when the money runs out? In most families, Mom and Dad are synonyms for “bank”, “line of credit”, and “ATM”. Your children know they can turn to you in times of need. If your children have the right cover in place, their dependency on you may be more emotional than financial – a situation that’s better for everyone.
When your children are ready to move out on their own, you’ll walk them through the basics: how to plan a budget, pick a good place to live, choose a reliable car, and negotiate a good salary. Don’t forget to suggest that your young adult children put insurance cover in place to protect themselves and their young families. Acting early gives your children access to cheaper premiums and easier underwriting due to the likelihood of better health.
Tackling Your Biggest Fears
When your children are out on their own and firmly established, make sure to talk with them about putting cover in place. Poor financial planning can leave parents caring for their children or even their grandchildren for the rest of their lives. No one wants to risk destroying their retirement plans and mandating an unexpected financial obligation for the rest of their lives.
Similarly, consider protecting your own parents from the need to care for you in case of permanent disability or injury. As parents, our hearts are always open, but the reality is that long-term care is a burdensome financial obligation. A burden that your loved ones don’t need and most likely aren’t prepared for. Having the right plans and protections in place can prevent accidents, illnesses, and death from financially ruining your loved ones.
Be the educator every parent hopes to be. If you would like to discuss life insurance with your children, contact one of our advisers. Fairbridge believes in family and we look forward to helping you protect yours. We’ll gladly provide an explanation of your options for child cover if your children are under 21, and your older adult children’s life insurance options once they’re out on their own.