As a parent, there are many factors that you need to take into consideration when it comes to providing for and protecting your child. While some things are beyond your control, planning for their financial future is something that you can start today. However, deciding when to take life cover can be a difficult decision
You may wonder if you are young and healthy, do you really need life cover? Or if you wait too long, will it be too expensive or even too late? We break down when it will be the right time for parents to take out a life insurance policy.
Is there a best time?
There are many reasons why parents are interested in taking out life cover. Not only does it offer financial stability for their loved ones in the future, but it also gives parents peace of mind knowing that their child's financial needs will be covered even when they die. But when is the best time to do this?
Ideally, both parents need to have separate life cover policies to protect their partner and their child. The best time to do this is as soon as your child is born. You also have the option of taking out a policy, even before you have a child. Life insurance policies come with a feature that allows you to add and remove beneficiaries at a later stage to keep up with the changes in your life.
Before they are born
When preparing your bundle of joy for the world, it is equally important to consider their financial future. Although it is something that parents don't want to think of, it's also crucial to think about how you can provide for them even in the unfortunate case of dying while they are still young. Taking out a policy before they are born doesn't only protect you, but it also ensures that the policy protects them too and grows with you. Furthermore, having a policy while you are still young and healthy also means you save on your premiums, compared to taking a policy at a later stage where premiums can increase significantly.
When they have just been born
The next best time is to apply for a policy when they are born. Some insurers will require that your child be a certain age before you can add them as a beneficiary, but you should be able to add them. Having a will in place can also help protect your child and allow you to have control over when the funds get released for them to use.
Before you turn 65 years old
It's equally possible for people to want to take out life cover when they are older. However, it is vital to keep in mind that the premiums for a policy could be higher due to changes to our health as we age. It is also possible that you may contract an illness that could prevent you from getting your policy approved. Most insurers in South Africa do not cover people who are over the age of 65 years old due to the level of risk that comes with being this age.
