Business

Are new mums looking after their child's financial as well as physical health?

Mum naps while her newborn is sleeping. but is she thinking about insuring her child?

DID you know that many first-time mums believe they're protected by divine providence? They believe that nothing untoward can come their way.

But while first-time mums have bought all the crucial items to care for and protect their new baby – on average £1,645 on car seats, prams, cots, nursery furniture etc – six out of 10 forget to ask what would happen to their child's financial welfare, if something tragic were to happen to them. They simply don't realise that now they are responsible, not just for the physical health, but also for the financial health of this new little person.

Now, to be fair, six out of 10 new parents do open some sort of savings account for their baby, which is brilliant. But my point is that just one in four (27 per cent) think of life insurance, to cover the security of their family.

And it turns out that you don't have to spend much more to be insured: nearly six out of 10 new parents say they never used many of the things they bought and thought they'd need – so there's money that could have been better spent insuring their life.

The most common items that parents said they didn't use at all, or could have done without were breast pumps (15 per cent), baby slings (14 per cent) cot mobiles (13 per cent) and ‘pamper treats' for the mum-to-be (13 per cent). The average spend per household on these items is £134.59.

Now, I would love to claim that I was out running about the streets with a tape recorder interviewing all the new parents who provided this information – but with over 2,000 parents covered, I have to admit it was Aviva who did the legwork.

The latest data in their new survey shows that of the 679,106 babies born in the UK in 2017, two-fifths or 285,225 were born to first-time mums. As we saw above, most of those did not take out life insurance to protect their family.

It's a pity, because life cover has come down in price a lot in recent decades, it's really not as dear as you'd think. How much are we looking at here, to get your family covered?

If you are a young couple in your late 20s, and are non-smokers (which is the usual profile for new parents), a monthly premium of £15 for a typical standard life insurance policy over 18 years would cover both of you, and provide a £237,123 tax-free sum if one of you died.

Some policies also include terminal illness benefit, which pays out an agreed sum if you are diagnosed with a terminal illness with less than 12 months to live. At least that would alleviate financial worries, at an otherwise very stressful time.

All of this stuff is not exactly cheerful, but insurance is always about the worst case scenario, isn't it? And you're not doing it for yourself, you're doing it for your family.

An important related issue is making a will. By writing a will you can clearly state who should have your house, insurance payouts, assets, all of your estate, if you die. You can also nominate who should be the guardians for your children, if both you and your partner were to die tragically before the kids turn 18.

The existence of a will really speeds things up for your family at a difficult time. If you die without a will, all this can be tied up in red tape for months, even years, for the process of probate, at a time when your family could be desperate for money.

Aviva also asked new parents what other measures they had taken, or would be taking to ensure their child's safety in the home. I smiled to think of you running about the house, in the first year that your little one is home - knowing, of course, that once they're up on their feet, they become little kamikaze pilots.

You may be among the two-thirds of new parents who instal stair-gates, or the two-thirds who move medicines out of reach. Or you might join the half of new parents who fit catches on kitchen doors and cupboards.

Well let me tell you, from the stories my clients tell me, sounds like your toddler will be very safe – unlike you. Trust me: your furniture and your belongings don't stand a chance. That kitchen door is a whiteboard for the first masterpiece, when the coloured markers come out; and no matter how careful you are, mum and dad, believe me - your mobile phone is going down the loo.

:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information on Facebook at “Kennedy Independent Financial Advice Ltd” or at www.mkennedyfinancial.com

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