Minimum Age For Life Insurance
Published 23rd August 2019
Can a person under 18 take out a life insurance policy?
As a general rule, nobody under the age of 18 in the UK may take out any kind of contractual obligation for finance or credit, such as life insurance. This also applies to those trying to apply for their own life insurance when under 18 years old.
This doesn't mean that somebody else, such as a parent, cannot take our life insurance on their kids behalf. There are a wide variety of specialist products out there that covers both adults and their children, and these policies can be taken out alongside existing policies or as a completely separate policy. Many people choose to take out protection when their kids are still infants, to offer financial security should the worst happen.
Should I buy life insurance for my children?
As parents, our children and family are are the most important thing in our lives, and making sure they are safe and well looked after if they are ever unwell is all we can think about. This often means when they are sick we take time from work to care for them, which in turn can effect our income. If this is just in the short term we can usually cope - but what if one of our children was to be diagnosed with a serious and critical illness?
When we take out a mortgage, most of us think to protect ourselves to pay it off or provide a lump sum for ongoing living costs should we fall ill, but give little thought to what would happen if our children need us to take time from work. Sadly, the hangover of the recession has meant most employers are now reducing their benefits, and often time off with full pay is no more than a month or two - that is if they even grant you a benefit at all if it's not you that's actually off sick.
In such serious circumstances, money is the last thing you want to worry about. As such, it is a growing concern for parents to ensure the whole family has the appropriate protection in place, to ensure a lump sum payout should the worst happen.
Who needs children's life cover?
Simply put, anyone with kids! Families that rely heavily on their income to support the household and routine monthly outgoings such as mortgage payments, bills and food, as well as other living costs, should consider what they'd do if one, both parents' income stopped or was reduced due to taking time off work.
How much children's life cover do I need?
The amount of cover you need for your children can be very different family to family. Those with extensive employer benefits that are sympathetic to children's needs may need less than others. Those relying heavily on income, with little in the way of savings, and a high proportion of their monthly income being spent on month to month bills and other costs.
Typically, the benefit most people receive is relative to the level of protection in place to cover their mortgage or family policy. Most insurance providers that offer children's critical illness cover will pay out 25% of a policy, up to a maximum of £25,000. To get the maximum possible, having two separate policies (one for mum, one for dad) instead of a joint named policy, can offer a double pay out, for relatively very little additional monthly cost.
Policies are usually either decreasing and match the mortgage, or level and pay out a set amount if at any point something happens up until the youngest child is 18.
If you're not sure what benefit is right for you and your family, don't worry - the expert protection advisers we work with will make sure you have the most appropriate and comprehensive cover available to suit you.