Millions of dads putting their families at financial risk
Millions of dads may be putting their family’s financial security at risk by failing to take out life insurance.
Research by Scottish Widows reveals half of men in the UK with dependent children – the equivalent of 3.9 million fathers – have no life cover.
This insurance product pays out a lump sum to your loved ones when you die and the money can be used for anything including mortgage payments, household bills and childcare costs.
Johnny Timpson, protection specialist at Scottish Widows, said: “Our research shows that in the event of themselves or their partner dying, 22% of men with dependent children believe they could rely on state benefits to support their family.
“While this provides a basic level of support, we would firmly advise people to make their own provision for themselves and their families in order to provide peace of mind with the knowledge that there’s a financial safety net in place.”
The research also found only 16% of dads have a critical illness policy, which pays out a defined amount if you’re diagnosed with a life-threatening or serious illness such as a heart-attack, cancer or stroke.
Fathers are more likely to insure their mobile phones than to take out critical illness cover, according to the study.
Despite the lack of insurance, more than a fifth (22%) of dads admit their household would be placed at financial risk if they lost their income due to unforeseen circumstances and 28% said they could only pay their bills for a minimum of three months.
Some 18% don’t see critical illness cover as a financial priority, 19% don’t think they need it and 17% said they can’t afford it.
With a new bereavement support payment system now in place, Scottish Widows said it’s more important than ever for dads to review their financial protection needs. It said 91% of widowed parents will be supported for a shorter period of time, now just 18 months, than they would under the previous system, which could pay out until the youngest child left school.
For more on the new bereavement support payment, see: ‘Heavy blow to families’ as bereavement benefit reforms hit today