We are always hearing about how important it is to insure our own lives and income, but what about insuring our children’s?
How would your adult child and their family survive financially in the unfortunate event of an accident or an illness that prevented them earning an income for an extended period of time?
Income protection, TPD and trauma insurance are often not a consideration to a young family in today’s financial climate with many struggling with mortgage repayments, education spending and increased living costs.
But what would be your role if your child and their family were suddenly without an income? Without adequate insurance how would they cope?
What if you had helped your child to buy his or her first home and that child suffered a long term-illness or disability?
How would that affect you if they couldn’t make the repayments?
Here’s a scenario...
Alan and Joanne’s married son Craig was involved in an accident, sustaining a back injury that ultimately prevented him from working for about two years. Unfortunately, Craig didn't have income protection or temporary salary continuance insurance.
After using all his sick leave and holiday pay, he had to sell his house or the bank was going to foreclosed on his mortgage. The house was sold, mortgage repaid but Craig and his young family were forced to move in with Alan and Joanne.
Eventually, Craig recovered and was able to return to work.
Aside from the emotional impact on Craig and his family, Alan and Joanne’s retirement plans were seriously compromised. Joanne’s health deteriorated due to the extra stress of the situation and she was suffered from some mental health issues as a result.
What could Alan and Joanne have done differently?
They could have asked Craig if his income was protected in the case of an unforeseen illness or injury, Learning that the young couple was allocating all spare cash to the mortgage, the parents might have offered to help pay for adequate insurance cover.
Even if you are not in a position to contribute to the cost of their insurance, raising the issue with your adult children and encouraging them to talk to a financial professional could be some of the best guidance you could ever give them. It also helps protect your hard earned wealth should something unplanned like this occur to one of your kids.