Life insurance for mums
What is life insurance?
First, let’s explain the concept of life insurance.
When you purchase life insurance (and pay your monthly premiums), you ensure that your dependents will receive a lump sum payout if you pass away during the time period of the policy. Your policy will also pay out if you received a terminal illness diagnosis with a life expectancy of 12 months or less.
People buy life insurance for a variety of reasons, including:
Cover a long-term financial commitment like a mortgageProvide financial support for their family if they were no longer around and bringing in an annual incomeLighten the load for their family at what’s sure to be a stressful time
You can find out more about life insurance in this article from MyTribe Insurance.
Why is life insurance essential for mums?
Around 27,000 parents die in the UK every year, leaving behind dependent children – Source
If you’re a mum – particularly if you’re raising children that depend on you – you should definitely consider purchasing a life insurance policy.
If you tragically passed away and your income was no longer coming in, how would your family cope financially? Would your surviving parent be able to maintain your mortgage or the multitude of family running costs? A lump sum from your life cover could be a financial safety net if the worst was to happen.
Perhaps you’re a stay-at-home mum and don’t earn an income in ‘the conventional’ way? Trust me. You work harder than anyone else out there! But if you unexpectedly passed away, who’s going to do all that work looking after your children? Your life insurance policy could pay for childcare so your partner can carry on working.
Whatever type of mum you are – new mum, stay-at-home parent, sole family breadwinner or one of a partnership – life insurance for mum is a great idea. It’s great for your mental health to know that you’re doing everything you can to look after your loved ones.
Only 27% of first-time parents are covered by a life insurance policy – Source
Single mums’ life insurance
If you’re a single mum, life insurance cover is essential, especially if you’re the only source of money for yourself and your children. What would happen if you passed away? How would you replace that lost income?
The loss of a parent is a devastating time for a child. However, with life cover, your children won’t need to worry about money. Life insurance can be the safeguard for your family’s financial future.
Types of life insurance for mums
There are several different types of life insurance cover available. All have different advantages and disadvantages for mums. Use this guide to help you select the right type of policy. To find out more, check out this article on life insurance types from MyTribe.
Level term life insurance
When you buy term insurance, you select a term, which is the length of time your life policy lasts for. You also select how much life insurance cover you want, which is the amount the policy will pay out if you pass away during the term.
Level term insurance guarantees that your payout and your monthly premiums stay the same throughout the length of the term.
As a mum, you can use level term to guarantee financial protection for your family if you were to pass away. You can set the term to end when your children may not need your income anymore, such as when they’ve grown up and started working.
However, with level term, your payout may get eaten up by inflation as time goes on.
Decreasing term insurance
Decreasing term is similar to level term, except that your cover amount decreases as you move through the term. Your monthly premiums remain the same.
Mums may find decreasing term insurance useful to pay a repayment mortgage. As time goes by, you pay off your mortgage and your outstanding balance goes down, you don’t require as much life insurance cover. Decreasing term is also typically more affordable life insurance than level term.
On the downside, if you’re only using your life insurance policy to cover mortgage costs, you won’t have anything left for financial support for your family.
Whole of life insurance
A whole of life insurance policy does what the title suggests. Rather than having a term, it lasts forever, guaranteeing that you’ll receive a payout whenever you pass away.
Whole of life is great for mums who definitely want to make a financial provision for their family when they pass away. However, it’s usually more expensive than a term life policy.
Critical illness cover
Typically an add-on to life insurance, critical illness cover pays out if you are diagnosed with a critical illness recognised by your insurance company. At the start of your insurance policy, your insurer will give you a list of critical illnesses (such as cancer, heart attack and stroke).
If you contract a serious illness and it’s on your list, your critical illness cover will pay out a cash sum which can help your family cope as you recover.
Joint life insurance
If you’re part of a couple, you may prefer to take out a joint life policy alongside your partner.
The attraction of a joint policy is that it’s usually cheaper than insuring both you and your partner on separate policies.
However, a joint life insurance policy only pays out once, so if your partner passes away, you’re no longer covered.
Family income benefit
If you choose family income benefit life insurance and you pass away during the term, your policy will pay out a fixed amount monthly to your dependents until the end of the term.
These regular payments act as a replacement for your regular income.
Children’s cover
Some life policies offer optional children’s cover. Like critical illness cover, this part of your insurance pays out a lump sum if your child falls seriously ill during the term.
However, it’s important to remember that it’s only critical illness that is covered for children. Insurers have a minimum age for life insurance of 18. You cannot buy life insurance for a child that will pay out should they tragically pass away.
5 best life insurance policies for mums
Now, let’s look at five of the most popular mums’ life insurance policies. Every insurer works slightly differently, so use our guide to find the right cover for you.
Aviva
Aviva offers free parent life cover for a year, with a cover amount of £15,000. After the first 12 months is up, we recommend you sign up for a longer term.
Each parent can apply for one policy per child. If an insured parent passes away during the 12-month term, Aviva will pay out £15,000 to the surviving partner. Parents can take advantage of this offer until the child’s 4th birthday.
Key benefits
It’s freeA great taster of the peace of mind life insurance bringsIf you already have life insurance with Aviva, you can still grab this offer
Disadvantages
£15,000 isn’t a massive amount of coverIf you want to carry on after 12 months, you’ll have to payThis offer only applies until your child is 4
Reviews
Aviva has a 4.4/5 rating on Trustpilot from more than 26,000 reviews.
Not all of these reviews are for life insurance. However, with such an impressive score, we can reasonably believe that Aviva customers are impressed with their services.
The Exeter
The Exeter specialises in insuring mums who may be denied life insurance elsewhere.
If you have a pre-existing medical condition, such as diabetes, or if you’re overweight, other insurers might not give you life insurance. Not The Exeter. They’ll welcome you with open arms.
Key benefits
Available cover ranges from £20,000 to £3,000,000Terminal illness cover includedFlexible – Alter your policy terms at any time
Disadvantages
Only level and decreasing term life insurance availableNo critical illness add-on availableChildren’s cover not available
Reviews
The Exeter has a 4.5/5 rating from 651 reviews on Trustpilot.
Again, this score covers all of The Exeter’s services, not just life insurance. However, we can see that customers rate their willingness to insure people who have had applications turned down elsewhere.
Legal & General
Legal & General is the UK’s best-selling life insurance provider. It’s also Moneyfacts’ life insurance provider of the year for 2022 (for the third year in a row).
With monthly premiums as low as £5, Legal & General aim to make life insurance accessible to everyone. Mums will be interested to know that no insurer covers more families than Legal & General.
Key benefits
Terminal illness cover as standard. Critical illness cover optionalSpecial offers for new customersGet a quote in around 2 minutes
Disadvantages
Some exclusions in operation for the first 12 months of the policy
Reviews
Legal & General’s life insurance service has a 4.5/5 rating on Trustpilot.
Customers enjoy their cost-effective insurance products and straightforward application process. However, some customers complain that it takes a long time to get through to Legal & General’s helpline on the phone.
Zurich
From only £5 per month, you can get life insurance policies from Zurich.
Zurich’s critical illness cover list contains 40 conditions, wonderful peace of mind for mums who want to look after their family. Zurich also provides mental health support as part of its life insurance package.
Key benefits
It’s simple to get cover for your children as well as yourselfIf you separate from your partner and you have a joint life insurance policy, it’s easy to divide the policyIn 2020, Zurich paid life insurance claims more than 98% of the time
Disadvantages
Critical illness cover is only available with a life insurance policy, not as a standalone product
Reviews
Zurich Insurance has a 3.9/5 rating on Trustpilot. However, this is for all its insurance products, not just life cover.
Zurich’s life insurance service has an expert rating of 5/5 from Defaqto.
LV
LV aims to make life insurance simple. That’s great news for busy mums on the go.
As part of its life insurance package, LV offers access to online doctor services, a legal advice line and many other member benefits for no extra charge.
Key benefits
Cover starts from £5 per monthSpecial offers for new customersAccess to doctors and legal advice for policyholders
Disadvantages
LV may contact your doctor for a medical report as part of your applicationYou’re not always able to make changes to your LV policy as a result of life events
Reviews
LV’s Trustpilot score is a very good 4.6/5. Again, this is for the full range of its insurance products. However, we can see from the reviews that customers love LV’s affordability and customer experience.
