PROTECTION GUIDES
Life insurance for parents
Make sure your children would be looked after financially, whatever happens, until they can stand on their own feet.
The short answer
Life insurance for parents pays a lump sum if you die during the policy term, which your family can use for childcare, day-to-day living costs and education. Most parents choose level cover that lasts until their youngest child is expected to be financially independent.
The amount depends on how many children you have, their ages, what your family spends, and what other money would be available.
What your children would need
Children rely on their parents for years, and the costs change as they grow. If a parent died, the family would still need to pay for:
- •Childcare: nursery, childminders, after-school clubs and holiday care, especially if the surviving parent needs to work more.
- •Living costs: food, clothes, bills, travel and the everyday spending of a growing family.
- •Education: school trips, activities, and support through further education or university.
- •Housing: rent or mortgage payments, so the children can stay in the home they know.
Life insurance gives the family a lump sum to meet these costs, so the surviving parent or guardian is not left to manage them alone.
Your options
Level term cover
The amount of cover stays the same throughout the term. It is the usual choice for family protection, because children's costs do not fall in the way a repayment mortgage does.
Cover for each parent
Each parent can have their own policy, with an amount that reflects what the family would lose. Separate policies also mean the surviving parent keeps their own cover after a claim.
Combining with mortgage cover
Some parents have one policy to clear the mortgage and another for family living costs. Our guide to life insurance for your mortgage covers that side.
New babies, single parents and longer-term dependency
New babies
A new baby, whether your first or a later child, is a good time to review your cover. The years of support ahead have just grown, and an older policy may not stretch far enough.
Single parents
If you are raising children on your own, they depend on you for both income and care. There may be no second income to fall back on, so life cover can matter even more. It is also worth thinking about who would look after your children, and making a will that names a guardian.
Children who may depend on you for longer
Some children, including those with additional needs, may rely on their parents well beyond 18. In that case a longer term, or cover that does not end at a fixed date, may be more suitable; our article on term versus whole of life insurance explains the difference. We can talk through the options with you.
Who it suits, and when it may not be needed
Who it can suit
- •Parents whose income pays for the household
- •Parents who provide most of the childcare, even without an income
- •Single parents who are the sole provider
- •Parents of children who may need support into adulthood
When it may not be needed
- •Your children are grown up and financially independent
- •Savings, investments or other cover would support your family for as long as they need it
- •Existing policies already match your family's needs and you expect them to continue
How much cover, for how long, and what it costs
The main things that shape your cover are:
- •The number and ages of your children, and when the youngest is likely to become independent
- •What your household spends each year, and for how many years support would be needed
- •Debts such as a mortgage, and whether they are already covered
- •Savings and any death-in-service benefit, which usually ends if you leave that employer
- •Your age, health, smoking status and occupation, which the insurer uses to set the premium
Worth knowing
It is better to have some cover that you can afford to keep than a larger policy you later cancel. We can help you find the balance.
What life insurance for parents does not cover
Life insurance pays if you die during the policy term, subject to the policy terms. Many policies also include terminal illness benefit, which can pay out early if a diagnosis meets the policy's definition. It does not pay if you are ill or injured and cannot work. For that, look at why income protection is worth considering and critical illness cover.
Talk to us about protecting your children
Tell us about your family, your household costs and any cover you already have. We will work out an amount and term that fit your children's needs and your budget. There is no fee for our advice.
How CoverLife can help
CoverLife Insurance gives personalised protection advice, with a dedicated adviser for your application and ongoing support. We have access to a panel of 15 protection insurers, with availability varying by product and circumstances, and we compare benefits and terms alongside price. We also help with policy reviews and with applications involving medical conditions, unusual occupations or hazardous hobbies.
We charge no advice or arrangement fee; we receive commission from the insurer. CoverLife Insurance is a trading name of CoverTrade Risk Management Ltd, authorised and regulated by the Financial Conduct Authority, firm reference number 1020148. More about CoverLife
Related guides
The questions people usually ask next.
- Life insurance for stay-at-home parentsHow to value the care a parent at home provides, even without an income.
- Mortgage life insuranceClearing the mortgage is often the other half of protecting a family.
- Children's critical illness coverWhat happens if your child, rather than you, becomes seriously ill.
- Why consider income protection?Life cover pays on death; this covers a long spell off work through illness or injury.
Common questions
When should parents take out life insurance?+
Many parents look at it during pregnancy or soon after a birth or adoption, because that is when someone starts to depend on them financially. There is no need to wait for the baby to arrive. Applying while you are younger and in good health generally means lower premiums.
How long should life insurance for parents last?+
A common approach is to set the term to end when your youngest child is expected to be financially independent, for example after they leave school or finish further education. If a child may depend on you for longer, or you want to cover a mortgage that runs beyond that point, a longer term may be better.
Should I review my cover when we have another child?+
Yes. Another child usually means more years of costs and possibly a longer period before your youngest is independent. Your existing policy will not change on its own, so it is worth checking the amount and term. Some policies let you increase cover after a birth or adoption without further medical questions, within limits set by the insurer.
Do both parents need life insurance?+
Often, yes. If either parent died, the family would lose something, whether that is an income, childcare and running the home, or both. The amount each parent needs can differ, and a parent who does not earn may still need cover to pay for the care they provide.
Who receives the money if we have young children?+
Children cannot manage a lump sum themselves. Many parents write their policy in trust, so the payout goes to trustees they have chosen, who then use it for the children. We explain how this works when we set up your cover.