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Contact us | www.future-financial.co.uk | E-mail your comments | Archive | |
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“Non-working” parents “Non-working” in this context means not economically active; anyone who thinks looking after children (or older generations, for that matter) is not work, has never done it!
It can be all too easy to focus insurance on what might happen if the principal breadwinner is lost to the family; yet the loss of a carer can be just as financially devastating. Yet if you consider what many carers actually do, it can consist of: part-time paid work, cooking, cleaning, washing, looking after sick children, as well as preparing those who are ‘fit’ for school, games, leisure activities and then getting them there! In most modern families, many of these are actually shared responsibilities but in practice primary caring usually falls to one person and that is frequently the lower earner (almost irrespective of the hours worked). Does this matter? If the carer were no longer available to undertake these tasks, not to mention possibly contributing towards the family budget as well, they would have to be undertaken by someone else. In the short term, this will fall to the remaining parent. But from then on, his or her own earning potential becomes even more important to the family; time devoted to caring, while socially important, detracts from the ability to earn sufficient for the family to carry on. There is an alternative The importance of an alternative source of income to cover the longer term cannot be over-emphasised. Having access to a lump sum sufficient to remove all financial concerns is one way of allowing the family to address other, more important issues, such as starting the grieving process. Ideally, insurance should be adequate to cover the entire amount of any outstanding borrowing, including mortgages, credit cards and other secured and unsecured loans, plus something more to provide for living expenses for a few months. The longer term It is important, however, also to consider the longer term. As the immediate impact of what has happened fades, so can the support provided by the extended family and friends, leaving the immediate family to ‘pick up the pieces’. During this period and beyond, having a source of income that allows the surviving parent to focus more on the family than might previously have been the case is one of the factors that could speed the recovery process. Insurance can provide both a lump sum and an income for as long as may be deemed necessary in order that the family can regroup and move forward. The cost need not be expensive, because insurance companies know that most people tend to live longer than earlier generations, so the number of claims will be less than may once have been the case. What about sickness? It is also usually possible to arrange insurance to provide an income should the caring parent become incapacitated through injury or illness for a sustained period although the level of cover available may be limited. |
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©futurefinancial This publication represents our understanding of law and Inland Revenue practice as at the date of publication. It does not provide individual tailored investment advice and is for guidance only. Rules may vary for Scotland and Northern Ireland. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. The value of land and buildings is generally a matter of a valuer’s opinion rather than fact. The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Your home may be repossessed if you do not keep up repayments on your mortgage. Loans are subject to status and written details are available on request. Always seek independent advice from a qualified financial adviser. Think carefully before securing other debts against your home. Fees for mortgage advice maybe charged and for details of these please contact us. The Financial Services Authority does not regulate all the activities undertaken by the company, including taxation advice and overseas mortgages. |
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