How financial protection could offer security to parents

18 Apr 2024

How financial protection could offer security to parents

Two girls playing on a swing.

As a parent, your child facing an illness could affect your finances just as much as becoming ill yourself. Appropriate financial protection could offer you a safety net when you need it most, including if you need to take a long period off work to care for your child.

Read on to find out how financial protection could offer parents peace of mind and financial security if the worst should happen.

Financial protection could pay out a lump sum if your child is diagnosed with a critical illness

No parent wants to think about their child being diagnosed with a serious illness, but, while rare, it does happen.

Reviewing whether critical illness cover could provide security for your family now means that if your child suffers an illness you can focus on them, rather than worrying about your finances.

Critical illness cover pays out a lump sum if you’re diagnosed with a covered illness. If your child is diagnosed, it will usually pay out a proportion of the full amount, such as 50%. This financial safety net could mean you’re able to take time off work to care for your child or spend it enjoying time with your family.

Critical illness cover might also come with other benefits that would be valuable for your family, such as:

  • Lump sum payout if your child is hospitalised following an accident
  • Accommodation payments so you’re able to stay close to your child if they’re in hospital
  • Childcare costs if you’re diagnosed with a critical illness.

The cost of critical illness cover will depend on the potential payout you want, as well as factors like your age and health. If you don’t pay the premiums, your cover will lapse.

Often, children will be added to your critical illness cover automatically. However, for some providers, you may need to contact them, and your premiums could rise as a result.

Your children will typically be covered from when they are a few weeks old until they’re 18, or 21 if they’re in full-time education. This can vary between providers, so it’s important to check the details when comparing options.

There might be other restrictions you need to be aware of. For example, some forms of cover will allow only one claim per child or may exclude conditions that are present at birth.

Private medical insurance could also put your mind at ease

While you’re considering taking out financial protection that would pay out if your child is diagnosed with a serious illness, you might also want to think about private medical insurance.

According to a BBC report, waiting times and staff shortages have led to public satisfaction in the NHS falling. In fact, just 24% of people polled said they were satisfied with the NHS in 2023.

If you’re worried about accessing services through the NHS, private medical insurance could offer you peace of mind. It could cut down waiting times for a range of services, such as tests and consultations, as well as more choice when deciding where your family receives treatment.

If you or your child needed to stay in a hospital, private medical insurance could also cover the cost of a private room to give you more privacy.

It’s not just physical illnesses that private medical insurance might cover either. Some providers could also give you access to mental health services, which may be valuable for your child.

Indeed, Aviva reported that the number of children and young people seeking support for their mental health increased by 25% in 2023 when compared to just a year earlier.

The cost of private medical insurance will depend on a range of factors, including who is covered, your lifestyle, and family medical history. The level of cover can vary. So, taking the time to understand how comprehensive cover is and any exclusions that might affect your family could help you choose an option that’s right for you.

Contact us if you’d like to discuss how you could prepare for the unexpected

Taking out appropriate financial protection is just one way you could prepare for the unexpected and protect your family. If you’d like to talk to us about how you could update your financial plan to reflect your priorities, please contact us.

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited.  08/04/2024



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