One of the most rewarding things about being a financial adviser is seeing the positive impact an insurance policy can have on a family’s life.
That’s why I was particularly interested in the findings from a recent study* that explored the impact the death of a parent has on children and the surviving parent, comparing the results between insured and uninsured households.
I wanted to share some of the key findings with you as I think they help illustrate why life insurance for the family is so valuable.
What Impact Does the Death of a Parent Have on Children
The study found that the death of a parent can have wide-reaching impacts on children. For example, among the children in the study:
- 67% took on more household tasks and chores
- 43% reduced their involvement in social activities
- 41% stated a worsening in academic performance.
Many children were forced to grow up faster than they would have otherwise, and unfortunately, this often comes at the expense of their social lives and their studies.
It’s worth noting that the parents surveyed often underestimated the impacts on their children, so the changes are not always obvious.
The study also highlighted some worrying trends with children’s mental health, with 29% of the children studied experiencing anxiety/panic disorders, depression, or abusing drugs and alcohol.
How Does Having Life Insurance Help?
Among these upsetting findings, it’s heartening to see that life insurance had a significant impact in helping families cope with the loss of a parent.
The most obvious impact came from an increased level of financial stability for those families who had cover in place.
Among families without insurance, the percentage who rated their finances as ‘struggling’ jumped from 14% to 47% after the death of a parent. By contrast, among families with insurance, the percentage of families who rated their finances as ‘adequate’ increased from 44% to 56% after the death of a parent.
This financial stability had a flow-on effect to other aspects of the family’s situation. Families with life insurance were more likely to stay in the family home, increase the amount of time they spend together, and maintain childhood friendships than those without insurance.
Yield Financial Planning is Here to Help
Whether it’s something as tragic as the death of a parent, or an illness you can recover from, it’s always nice to have the financial freedom to make the best choices for yourself and your family. That freedom is why life insurance is such an important and valuable asset.