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 Tim was involved in a car accident, sustaining an injury that prevented him from working for two years. Unfortunately, Tim did not have income protection or accident insurance.
The bank foreclosed on his mortgage and Tim and his young family were forced to move in with Alan and Joanne. Eventually, Tim recovered and was able to return to work.
Aside from the emotional impact on Tim 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 diagnosed with severe depression.
What could Alan and Joanne have done differently?
They could have asked Tim if his income was covered in the case of an unforseen illness or injury and knowing that the young family were putting all of their spare cash into their mortgage, they 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.