You accidentally break your reading glasses. Your medical aid is used up and you can’t afford a new pair, but your son and daughter come to the rescue and foot the bill. On the way home from the consultation, they take you grocery shopping. Every small act of care, kindness and ongoing financial assistance from your children makes a huge difference to your life – and would be greatly missed if they were no longer around. Should you take out insurance to fill the financial gap their passing would leave?
We take a look at the whys and how of taking out insurance for your adult children.
You can take out insurance for your adult children
First things first – you can take out insurance on your adult children because there is an insurable interest. Every valid insurance contract must have an insurable interest, which exists when there is a close or dependent relationship. Good examples of where there is an insurable interest is when your children help out with living expenses, or drive you to the shops.
Is life insurance for your children really necessary?
If your children pass away, or become disabled, how would your life change? Would you be able to cope? Many parents would miss this support enormously, and may face financial hardship. While the payout from an insurance policy can never replace the care and love of a child, the financial hardship can be lessened.
When asking yourself if you should take insurance on your children’s lives, think of the many ways they support you, including:
- Directly with financial support – sending money to you on a regular basis
- Buying necessities and nice-to-haves such as groceries, utility bills, airtime and data, subscriptions, transport costs, holidays and new clothes
- Giving their time to help out – taking you to medical appointments or the bank, shopping, to pay bills, or even to vote!
How to take out a life insurance policy on your adult child
A life insurance policy, with disability cover, can be taken on the life of your adult child. You, the parent, can either be the policy owner and be responsible for paying the premiums, or your child can be the policy owner and be responsible for paying the premiums. You can discuss these options with your child and decide which one is most suitable for your circumstances.
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Applying for life insurance is easy – you can get a quote and buy online or chat to your financial adviser who will guide you through the process. Your children will need to answer medical questions and 1Life requires an HIV test for life cover policies. The process is quick and easy to follow.
You will need to:
- Work out a suitable and affordable sum assured
- Make sure the premium is paid each month
- Name either one or both parents as beneficiaries so that they will receive the payout from a valid claim
- Review the policy regularly and make sure contact details as well as beneficiary details and contacts are up to date
- Have a clear understanding of the claims process, so you know what to do if the time comes
Top tip: Make sure the policy covers your child in the country where they live. 1Life policies cover people who are resident in South Africa and spend most of their time in the country.
Protecting your loved ones
Life insurance helps you and your family protect your loved ones. The heartbreak of losing a child lasts a lifetime, but the payout from an insurance policy can ensure you are still supported and financially comfortable if they pass on or become disabled. Chat to your children about taking a life policy today.