Life Insurance for Parents

Consider your life insurance policy options as a parent and find out whether you can buy cover for your parents with Savvy.

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, updated on July 19th, 2023       

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We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.

As a parent, you want to ensure that your family is financially secure in the event of your injury, illness, disablement or death. That’s why purchasing a life insurance policy can greater bring peace of mind knowing that your loved ones can be taken care of if a covered event took place. With the right policy, you can protect your young family’s financial future and ensure that they can continue to live comfortably without the added stress of financial hardship.

Comparing life insurance policies is fast and easy when you do it through Savvy. With a panel of some of Australia’s leading life insurers, you’ll be able to consider a variety of offers in one place instantly by simply filling out an online form. Get started with a free, no-obligation quote through us today.

What are my life insurance options as a parent of a young family?

As a parent of a young family, there are four main types of life insurance you may wish to consider in Australia:

  • Life cover: this type of insurance can pay a lump sum benefit to your family if you pass away or are diagnosed with a terminal illness. The benefit can be used to cover things like funeral expenses, outstanding debts and your partner and children’s ongoing living expenses. You can insure yourself for as much as you can afford, with no set maximum for life cover.
  • Trauma cover: also known as critical illness cover, this type of insurance can pay a lump sum benefit if you're diagnosed with a covered critical illness or suffer a severe injury. The benefit can be used to cover things like medical bills, rehabilitation costs, and living expenses while you recover and can reach up to $2 million.
  • Income protection cover: this type of insurance can pay you a regular benefit of up to 70% of your income if you're temporarily unable to work due to injury or illness. This can cover a portion of your lost income and help you maintain your lifestyle and cover your expenses while you recover. This type of cover is popular with parents whose families rely heavily on their income but may not be necessary for stay-at-home dads and mums.
  • TPD cover: total and permanent disability (TPD) cover can pay a lump sum benefit if you become totally and permanently disabled due to a covered event and are permanently unable to work. The benefit can reach up to $3 million to $5 million in some cases.

Additionally, some life insurance providers may also offer cover for your children as an optional extra to your policy. This can provide you with a smaller lump sum payment if your child suffers a critical illness or major injury, is diagnosed with a terminal condition or passes away. Life insurance cover for your child can help ease the financial burden on families which may come with extensive medical treatments and end-of-life costs.

Crucially, all coverage will be subject to your insurer’s terms and conditions, so it’s essential to familiarise yourself with what is and isn’t covered as part of your policy agreement before you buy your cover.

It's important to consider which types of cover are most relevant to you and your family's needs and budget. When you complete a quote and compare offers through Savvy, you’ll be able to schedule a call and discuss your options and situation with a life insurance expert before you purchase your policy. You can get the wheels in motion on that process today.

Can I purchase life insurance for my parents?

If your parents are over 60 or in their elderly years and don’t have life insurance, you may be able to purchase cover for them. However, this will require you to satisfy several insurer criteria.

First and foremost, you’ll need to gain their express written consent as part of the process of buying life insurance for them. You won’t be able to buy life insurance for your parent without their knowledge or permission if they’re still able to make decisions for themselves.

You may also be required to prove that you have an insurable interest. This means that your parent’s death would leave you worse off financially, such as if they have outstanding debts (like a mortgage) which would be transferred to you should they pass away.

From there, your parent will need to meet their other eligibility requirements relating to age, health and if they have any pre-existing conditions. If all these criteria are met, your application for insurance may be accepted and coverage will be enacted (following any required waiting periods).

Types of life insurance

Why compare life insurance through Savvy?

Common questions about life insurance for parents

Can I purchase a life insurance policy for my parent if they’re no longer able to provide consent?

If your elderly parent suffers from a condition such as dementia or Alzheimer’s and is no longer able to provide consent, you’ll only be able to purchase life insurance on their behalf if you’ve been given power of attorney. You’ll need to be at least 18 years old to do this. However, even if you have power of attorney, a degenerative condition such as dementia can be difficult to insure, so it’s important to compare your options carefully to determine which providers may be able to offer cover.

Why is life insurance important for parents to consider?

Life insurance is important for parents to consider as it can provide financial protection for their family in case of a covered illness, disability or death. If you and your partner are paying off your mortgage, for instance, your life insurance payout may help cover your contribution if you were to pass away or become permanently disabled and unable to work.

Can I name my children as beneficiaries on my life insurance policy?

Yes – you can name your children as beneficiaries on your life insurance policy. However, if they’re under 18 at the time they pass away, your payout may be held by a trustee until they’re old enough to receive the funds.

Will I be able to increase my coverage if my family’s circumstances change?

Many insurers offer life event increases, which enable you to increase the level of cover on your policy in the event of a major life event. This may include getting married or divorced, having more children, the death of your partner or taking out a mortgage. However, you’ll need to meet further eligibility criteria to qualify for an increase.

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Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.