Life Insurance For Dads Policy Guide
Are you a Dad with a family to support? Have you thought about what would happen to your partner and children if you were to die unexpectedly?
Who would pay the bills? Who would pay the rent or mortgage? Is your family at risk of eviction? How would they survive daily, especially if you are the breadwinner?
Save Money And Get A Quote Now. Protect Your Family Before It’s Too Late.
Cost of Life Insurance for Dads (Based on £100,000 cover for a non-smoker in sound health)
| Age | Level Term (20-year term) | Decreasing Term (20-year term) |
|---|---|---|
| 20 | £3.62 | £4.34 |
| 25 | £4.72 | £4.92 |
| 30 | £4.81 | £4.97 |
| 35 | £6.01 | £5.08 |
| 40 | £7.84 | £6.05 |
| 45 | £10.06 | £8.09 |
| 50 | £15.16 | £10.98 |
Single vs. Joint Life Insurance Cost Comparison (For £100,000 over 20 years)
| Age | Joint Policy | Two Single Policies |
|---|---|---|
| 20 | £6.22 | £7.21 |
| 25 | £7.12 | £9.45 |
| 30 | £8.78 | £9.63 |
| 35 | £10.53 | £12.02 |
| 40 | £14.28 | £15.73 |
| 45 | £21.07 | £22.13 |
| 50 | £31.52 | £32.33 |
How Does Life Insurance for Dads Work?
Life insurance is a type of financial protection for your loved ones or dependents should you die suddenly.
By paying a monthly premium throughout a policy, the insurer will protect you by providing a lump-sum payout in the event of your death.
The payout size depends on numerous factors and is agreed upon with your advisor at the outset of the policy.
Do You Need Life Insurance?
An event may often trigger you to consider whether you need life insurance. Perhaps you have lost a spouse and now have to care for your child as a single parent.
Maybe you just got married or have purchased a property. Many circumstances can motivate you to look for the right insurance company.
Questions you need to ask yourself about the need for a policy include your current or expected financial commitments.
Areas that need consideration include:
- Childcare costs
- Household bills (including food and utilities)
- School of University fees
- Out-of-school activities
- Emergency funds that your family may require
Further considerations include whether you have any outstanding debt that still needs paying should you die unexpectedly.
It includes:
- Car loans
- Hire purchase agreements
- Debt consolidation loans
- Credit card debt
- Personal loans
- Mortgage
- Equity release loan
- Bank Overdraft
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Factors Affecting Premium Costs
| Factor | Impact |
|---|---|
| Age | The younger you are, the lower the premiums. |
| Health & Lifestyle | Better health and lifestyle lead to lower premiums. |
| Smoking Status | Non-smokers pay less. |
| Occupation | Riskier jobs may lead to higher premiums. |
| Policy Type | The type of insurance affects the cost. |
| Cover Amount | Higher cover amounts increase premiums. |
| Policy Length | Longer terms can increase premiums. |
Flexible Plans For Different Personal Circumstances
As Dads progress through their lives, personal and professional circumstances will change. Life insurance for men is a very flexible insurance product.
Policies can easily be adjusted to reflect a new situation, such as an addition to the family, a pay rise, buying a larger house, or even separating from your partner.
There is usually no cost to amend a policy claim, as insurers understand that it is unlikely that your circumstances will remain the same for the duration of the policy.
Every policyholder will likely have different personal situations, and a life insurance policy offers maximum flexibility.
Below, we have listed the main circumstances a Dad may find themselves in to help you envisage how a policy can assist you.
Life Insurance For Single Dads
Following a separation or the death of a partner, a single Dad still retains responsibilities for his children’s welfare, monthly bills, and rent or mortgage payments.
If a life policy is in joint names with the partner, this could be cancelled and set up as a sole policy. In a separation, liaising with an ex-partner can be a good idea to ensure adequate protection for the entire family, including the children.
Stay at home Dads
If you are a stay-at-home Dad, it often means your partner is the breadwinner and earns a higher salary.
As a stay-at-home Dad, you are likely responsible for cooking, cleaning, helping with homework, picking up children from school, and grocery shopping.
If something were to happen to you or your partner, how would you be able to maintain your household expenses, including childcare?
New Dads
If you have recently become a father, it may be worth considering taking out a policy sooner rather than later.
The earlier you take out a policy, the lower your premiums are likely to be if you have no underlying health conditions.
Why leave it and risk any adverse effects on your young family, should you unexpectedly pass away when your child is very young?
Older Dads
As people live longer or choose to focus on their careers before starting a family, some Dads are starting families in their forties or even fifties.
The older you are when putting a life insurance policy in place, the higher your monthly premium will be.
An underwriter will look at the risk associated with being an older policyholder and its impact on the likelihood that you could die, particularly if you have underlying health conditions.
If you are in your fifties or sixties, over-50s plans are a cheaper type of policy if you have paid off your mortgage and have children who have finished their education and are no longer reliant on you.
This is an option if you want to provide your dependents with a small nest egg and the funds to pay for your funeral costs. We look at the over-50s later in this guide.
Working Dads
Some Dads who work as employees may be covered by their employers’ life insurance and enjoy a death-in-service benefit. It gives financial protection for your dependents should you die.
If you are covered by death in service benefit, taking out life insurance can still be beneficial. If you have a large mortgage, the mortgage repayments may not be covered by the death-in-service benefit and may require a personal policy.
Working Dads who do not receive employer-based policy protection can consider either term or whole-of-life cover.
Self-Employed Dads
If you are a self-employed Dad, you do not have the luxury of a guaranteed salary should business slow down, unlike many people who work for a company.
Life insurance can provide that protection and peace of mind, so you know that, should something happen to you, your dependents will be financially provided for.
Dads to Be
If you are in a relationship and intend to have a family in the future, it may be worth taking out protection now rather than waiting until your child is born.
The younger you are when you take out a policy, the lower your premiums will be, assuming you are in good health.
When you welcome a new child into the world, having a watertight policy ensures the child will be well cared for if anything happens to you.
Types of Life Insurance Cover
Whole of Life
A whole-of-life plan is the most expensive type of life insurance. A lump-sum payout would be due should you die, whenever that is.
There is, in effect, no end date to a whole-of-life insurance policy. The younger you start the policy, the lower the cost.
If you create a policy when you are an older dad in your fifties, the price of the entire life policy can be very high.
Term life insurance
Term insurance is a policy that has a set end date. Typically, a term policy is set up to coincide with the end of a repayment mortgage or another financial commitment, which, once paid, means you are debt-free.
Term insurance is less expensive than a whole-of-life policy. Once the policy matures and you die, no payout would be due.
Over 50s plans
It is possible to get either term or whole-of-life insurance if you are over 50, but it can be costly. As mentioned previously in this article, another option is an over-50s plan.
The payout under this plan is significantly lower than for other types of cover because it is on a guaranteed acceptance basis.
Usually, over 50 plan payouts are capped at around £20,000 or £30,000 and can be used to cover funeral costs should you die, so your loved ones are not financially burdened.
Over-50s plans can also pay off debts, such as credit card balances or personal loans. Alternatively, they can be used to leave a gift for children or grandchildren.
Life Insurance Options – Cover Variations
The flexibility of a policy also extends to the premiums and payouts throughout the policy. Increasing, decreasing, and level cover are all options that you should consider at the start of your policy.
Increasing life insurance cover
Increasing your cover means your policy will always keep up with inflation. If you want your payout to retain the same relative value now as it did twenty years ago, you should consider increasing premiums.
The premiums will rise annually, in line with the inflation rate, as measured by the Consumer Price Index (CPI), a UK government inflation benchmark.
Decreasing cover
Decreasing cover is when the annual premium reduces over the life of a fixed-term life policy. This cover typically ties to a repayment mortgage and matches the mortgage’s payment schedule over its life.
This means that the coverage at the end of the policy will be minimal and designed to match the remaining mortgage debt should you die.
Level cover
The level cover keeps the premiums and subsequent lump-sum payout the same for the duration of the policy.
Inflation will affect the payout, as the lump sum agreed at the start of the policy is likely to be lower at the end, ten or twenty years later.
How Much Life Cover as a Dad Do I Need?
Suppose you are considering taking out Life Insurance cover. Sit down with a broker or advisor and provide them with a clear breakdown of your situation and financial commitments.
If you take out life insurance to protect yourself against a mortgage, you usually take out enough life insurance to repay the mortgage should you die before you pay it off.
If the need for a policy is not due to a mortgage, it could be to allow your dependents the ability to keep paying the bills and sustain themselves should you pass away. The monthly premium correlates to the size of the life insurance payout that you want to put in place.
How Much Does Life Insurance Cost?
For Dads, numerous factors affect the cost of life insurance premiums, with age, underlying health, and whether a policy is fixed-term (also known as level-term life insurance) or whole-of-life being key drivers of price.
For example, £100,000 of protection for a 30-year-old non-smoker can cost as little as £5 a month with a 20-year level-term policy. For the same person, whole-of-life insurance rises to £30 a month; for a 45-year-old non-smoker, a whole-of-life insurance quote is from £60.
How much for life insurance for smokers?
For smokers, insurance costs do increase. Using the same examples above, a 30-year-old smoker should expect to pay £ 7 for £100,000 of term life insurance, and whole-of-life could cost as much as £47. Whole-of-life insurance for a 45-year-old smoker can be quoted up to £100.
Associated Life Insurance Products for Dads
Life insurance provides a financial payout should you die. Other related insurances also offer financial protection, but they do not require you to pass away to benefit.
Critical illness
Should a surgical procedure or a medical diagnosis stop you from being able to work, it may put your financial circumstances under strain.
Critical illness cover gives a lump sum payout if you succumb to a qualifying illness. Not all diseases are covered under a critical illness policy; a list can be provided at the start of the policy.
Additionally, policies require that you survive at least 10 days after a critical illness diagnosis for a payout.
Income protection
If you cannot work for a long time due to injury or illness, an income protection policy can help you. By paying regular premiums throughout a fixed-term policy, you will receive a replacement salary if you cannot work until you can return to the workforce.
An income protection policy is built around your circumstances, which you will discuss with an advisor at the start of the policy.
A policy can provide a replacement salary for as little as 1 month to 1 year after you stop working.
If you have ongoing financial commitments, which include but are not limited to the following, you should consider income protection:
- Personal loans
- Mortgage
- Equity release loans
- Hire purchase agreement
- Bank loan
- Car loan
Summary
As we have outlined, all Dads, whether stay-at-home, older, or new, have varying personal and professional circumstances.
Life insurance policies can offer flexibility to adapt to any circumstance, either at the start or if a Dad’s situation changes during a policy.
For just £6 a month, a life insurance policy can provide peace of mind, knowing that, should you die unexpectedly, your loved ones will be financially protected with a lump-sum payout.
If you think a life policy applies to you, do not delay and put in a policy today!
Steve Case is a seasoned professional in the UK financial services and insurance industry, with over twenty years of experience. At Insurance Hero, Steve is known for his ability to simplify complex insurance topics, making them accessible to a broad audience. His focus on clear, practical advice and customer service excellence has established him as a respected leader in the field.
