Helping Protect What Matters: A Dad’s Guide to Life Insurance

As a dad, you take on many roles. You are often the provider, the protector, the mentor, and a source of strength for your family. Thinking about the future can bring up questions about how to continue to support your loved ones, no matter what challenges life might bring. This is where financial protection, like life insurance, can play a key part.

Life insurance for dads is not just about a policy; it can be about establishing financial security for your family’s future. It can help provide a safety net, designed to ensure your family’s financial needs could be met if you were no longer around. At Tom, we believe in straightforward information and clear solutions, helping you make informed decisions about your family’s financial wellbeing.

What is Life Insurance for a Family?

Life insurance is a type of financial protection that pays out a lump sum if the policyholder passes away during the policy term. For families, this payment is designed to help cover ongoing expenses, debts, or future costs.

At Tom, our policies are a type of ‘level term’ life insurance. This means that, typically, the payout amount and your premiums are designed to remain fixed for the duration of your policy. Other common types of life insurance include:

Decreasing Term Life Insurance: The payout amount reduces over the policy term, often aligning with a decreasing debt like a mortgage.
Increasing Term Life Insurance: The payout amount may increase over time to help keep pace with inflation.

Each type of policy can serve different financial planning goals. Our focus at Tom is to help you understand how a ‘level term’ life insurance policy could work for your family’s financial protection needs.

Why Might Life Insurance Be a Consideration for Dads?

For many dads, the decision to consider life insurance often stems from a deep-seated desire to look after their family. Here are some of the reasons why life insurance can be a valuable consideration:

Replacing Lost Income: If you are a primary or significant income earner, your income helps cover daily living expenses, mortgage or rent payments, and other financial commitments. A life insurance payout could help replace this income, allowing your family to maintain their lifestyle and financial stability.
Covering Debts: Many families have financial obligations such as mortgages, loans, or credit card debt. A life insurance policy could help clear these debts, potentially reducing financial strain on your loved ones during a difficult time.
Funding Future Expenses: Beyond day-to-day costs, you might consider the future expenses of your children, such as education, university fees, or even wedding costs. A life insurance payout can contribute towards these significant future outlays.
Covering Childcare Costs: If one parent primarily cares for children, a life insurance payout could help cover the costs of professional childcare if that parent were no longer able to provide it.
Funeral Expenses: Funeral costs in the UK can be substantial, with the average cost of a basic funeral potentially reaching around £4,285*. A life insurance policy can help ensure these immediate expenses are covered, easing a burden on your family.

How Much Cover Might You Need?

Determining the right amount of life insurance cover is a personal process, often depending on your family’s unique financial situation and future aspirations. Here are some factors you might want to consider when thinking about your cover amount:

Current Income: How much income would your family potentially need to replace to cover things like your rent or mortgage? Consider your annual salary and how long your family might need this support.
Outstanding Debts: Add up any outstanding debts, such as your mortgage, personal loans, or car finance.
Future Expenses: Think about significant future costs like university tuition, or even the general cost of raising children to adulthood.
Existing Savings: Factor in any savings or investments your family already has that could be used.
Inflation: You might also consider how inflation could affect the value of the payout over time.

A straightforward approach could involve multiplying your annual income by the number of years you want to provide financial support, then adding in your outstanding debts and anticipated major future expenses. This can give you a starting point for discussion.

Choosing Your Policy Term

The policy term is the length of time your life insurance policy is active. For a ‘level term’ policy, this typically means the cover amount and premiums stay the same for this chosen period. When deciding on the term, you might want to consider:

The Age of Your Children: Many dads choose a term that aligns with when their youngest child is expected to become financially independent, such as after completing university.
Mortgage Length: If your primary concern is covering your mortgage, you could align the policy term with the remaining years on your mortgage.
Retirement Age: Some individuals may choose a term that extends until they plan to retire, ensuring financial protection during their working years.

At Tom, we believe choosing the right term can be an important part of ensuring your policy fits your family’s long-term financial protection strategy.

Understanding Joint Life Insurance vs. Single Policies

When considering life insurance with a partner, you might come across the option of “joint life insurance.” A joint policy covers two people but typically pays out only once, usually upon the death of the first person, after which the policy ends.

At Tom, we believe in providing flexible options for both individuals. For these reasons, we do not offer joint policies as we want all policy holders to benefit from a policy payout to their loved ones. Our approach allows both partners to have their own individual life insurance policy, which means:

Two Potential Payouts: If both partners have separate policies, each policy could pay out independently upon their death, potentially providing two separate financial injections for the family.
Greater Flexibility: Separate policies can be tailored to individual needs and circumstances, and they are not tied together if one person’s situation changes.
Continuing Cover: If one partner passes away, the other’s policy remains active, continuing to provide financial protection.

This approach is designed to help ensure comprehensive financial protection for your family.

The Application Process: Straightforward Steps

Applying for life insurance with Tom is designed to be a straightforward process. Here is what you can typically expect:

Get a Quote: You will usually provide some basic information about yourself, your family, and the type and amount of cover you are considering.
Health Questions: You will answer questions about your medical history and lifestyle. This information helps the insurer assess the risk and determine your premiums. Be honest and accurate here, as this is crucial for the validity of your policy.
Policy Details: Once your application is assessed, you may receive details of your proposed policy, including the premium and terms.
Acceptance: If you are happy with the terms, you can accept the policy, and your cover can begin.

It is typically a good idea to review your policy documents carefully, as they contain all the details of your cover, including what is covered and any exclusions.

Serious Illness Cover: An Added Layer of Financial Protection

Beyond life insurance, another form of financial protection that dads might want to consider is Serious Illness Cover (SIC). While life insurance provides a payout upon death, SIC is designed to pay a tax-free lump sum if you are diagnosed with a specified serious illness during the policy term and meet the policy’s conditions.

This lump sum could be used in a variety of ways:

Covering Income Loss: If a serious illness prevents you from working, the payout could help cover a period when your income might be reduced or cease. This is not ‘income replacement’ in the way an income protection policy works, but rather a flexible lump sum to help cover expenses.
Medical Treatment: It could help contribute towards private medical treatment, rehabilitation, or adaptations to your home.
Paying Bills: The money could help ease financial worries, allowing you to focus on recovery without the added stress of managing household bills or mortgage payments.

The person who makes a claim on a Serious Illness Cover policy is typically the policyholder themselves, upon diagnosis and meeting the specific policy conditions. Loved ones or beneficiaries do not make claims on SIC policies in the same way they might on a life insurance policy.

At Tom, we believe in empowering dads to consider comprehensive financial protection options, and Serious Illness Cover can be an important part of that discussion.

Reviewing Your Policy

Life changes, and your financial protection needs might change with it. It can be sensible to review your life insurance policy periodically, especially after significant life events such as:

Having another child
Buying a new home or increasing your mortgage
Changing jobs or your income level
Your children reaching new life stages (e.g., starting university)

Reviewing your policy can help ensure your cover continues to align with your family’s current and future financial protection needs.

Taking the Next Step

For many dads, securing their family’s financial future is a top priority. Life insurance can be a fundamental part of achieving that goal. At Tom, we aim to provide you with the information and tools to help you make choices that are right for your family.
Ready to explore your options?

TL;DR: Life insurance for dads can provide crucial financial protection for your family if you were to pass away. It can help replace lost income, cover debts, and fund future expenses like education. Tom offers ‘level term’ life insurance, where the payout and premiums are designed to remain fixed. Consider factors like income, debts, and future costs when deciding on cover amount and policy term. While we do not offer joint life insurance, individual policies can provide separate payouts and flexibility. Serious Illness Cover is also available, providing a lump sum if you are diagnosed with a specified serious illness, helping to manage financial impacts. Regularly reviewing your policy can help ensure it continues to meet your evolving family needs.

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*Statistic Source: SunLife Cost of Dying Report 2024 (Average cost of basic funeral in the UK) – https://www.sunlife.co.uk/over-50-life-insurance/funeral-costs/