New research has found many parents don't have potentially vital cover. But this could be an expensive mistake.
As the cost of raising a child continues to increase, two-fifths of parents now have no life, income protection or critical illness insurance in place.
New research by insurer LV= found that 41% of parents have no protection insurance, while one in three said they have had to reduce the amount they save for the future in the past year.
Child cost keeps climbing
The cost of raising a child now averages £227,266, according to the study, with education (not including private school fees) and childcare the biggest costs.
Over two-thirds of parents said they have made cutbacks to meet the increasing cost of raising a family.
However, cutting back on insurance that could protect your family if the worst should happen is a risky move.
Could be cheaper than you think
Life insurance and income protection insurance are arguably the two most important pieces of cover. Yet neither has to be hugely expensive.
In fact, according to figures from broker LifeSearch, people pay an average of £27 a month for protection policies.
And £200,000-worth of decreasing term life insurance, which decreases in line with your mortgage, over 25 years for a 35-year-old male non-smoker would cost £8.67 a month from Legal & General.
Meanwhile, £200,000-worth of level-term insurance for the same 35-year-old male non-smoker over 25 years would cost £11.87 from Beagle Street.
How to pay for it
If you’re already making cutbacks, it might seem a stretch to make even more in order to pay for cover.
But spend an hour or two writing down exactly what you spend each month and you might find there are more savings to be made.
Alternatively, you can use our MoneyTrack budgeting tool to easily identify (via nifty pie charts) where exactly your money is going.
The sacrifices you make now could prove crucial at some point in the future.
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