You are nearing retirement, worked hard for many years and looking forward to enjoying a comfortable retirement that you always hoped for.
Unexpectedly you receive bad news that your son or daughter has been injured from an accident and unlikely for him or her to ever walk again.
With costly medical bills adding up, and your son or daughter set to be out of the workforce for a long period of time and unable to pay their living expenses, you invite him or her back to your family home. He or she is uninsured and unable to finance ongoing living expenses. Life insurance for over 50s is very important.
As a parent you will do whatever it takes to help your children when they are in need, and luckily for your children you are now in a position to help financially.
This financial help could impact the comfortable retirement you are looking forward to, you may have to stay in the workforce longer, forego that overseas trip you had planned or in some cases even sell the family home to help fund your child’s medical expenses, mortgage or living costs.
What if you had to provide for your grandchildren? What would that mean for your own financial situation – both now and in the future?
These scenarios may sound extreme, but consider the following statistics:
• One in five families will be impacted by the death of a parent, a serious accident or illness that renders a parent unable to work#.
• Two thirds of families with kids at home couldn’t meet their expenses beyond 12 months of the main breadwinner having passed away†.
• 95% of families do not have adequate levels of insurance#.
Gen X and Y are generally comfortable with a high level of debt, and often take sizeable loans to enter the housing market.
When your children are working full time this high level of debt is sustainable, but if they have not protected their most important asset? Their capacity to earn an income they could leave themselves and their own families extremely exposed.
Your children will generally discuss any major financial decisions with you like getting married and purchasing a house, this might be a good opportunity to raise whether your children are adequately protected against injury or illness or even death and the impact it may have on all the family.
One of the good things about taking out life insurance from a younger age is that premiums are often very affordable. Life insurance for over 50s is more expensive.
This cover will provide some financial relief in the event of serious sickness or injury. It will also make available a lump sum on death that may be used to pay off debts, medical bills or help the family meet ongoing living costs.
The best way to help your children get the right level of protection for themselves (and you!) is to encourage them to discuss their life insurance circumstances with a financial adviser.
# ‘The Lifewise/NATSEM Underinsurance Report’ – February 2010
† ‘Analysis of Insurance Needs’, Rice Warner Actuaries – May 2005
This information does not take into account your personal needs and financial circumstances. You should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
