With your house paid off, the children grown up and your retirement savings on target, you could be lulled into a false sense of security that you no longer need personal insurance.
If you or your partner were to die, then little may change in your financial situation. But what would happen if one of your adult children had an accident and needed care for the rest of their lives?
If your adult child is not insured, then you might find that all you have worked for over the years is whittled away by the many costs associated with assisting in their care.
After all, whatever their age, they are still your children and you will always want the best for them, be it the best care, the best medical treatment and/or a refit of their home to accommodate any new needs.
But at the same time, you are entitled to enjoy your retirement rather than have a substantial amount of your retirement savings redirected into helping your child.
Taking out insurance in your child’s name could be a solution as it would enable them to enjoy a reasonable standard of living should they become permanently disabled as a result of an accident or illness.
You could either make the payments on their behalf by owning the policy, with a view to transferring the policy to them at a later date, or simply encourage them to have their own cover. Your children may also not be aware that they can hold cover within super, which won’t affect their day-to-day cash flow.
Of course, many super policies automatically carry Term Life and Total and Permanent Disability (TPD) insurance, but this cover may not be enough. Rice Warner Actuaries estimate that life insurance cover within super is on average only 20 per cent of what is needed.