Life Insurance vs Income Protection As A Mum: Which Is Best?
As a mum, choosing between life insurance & income protection is an important decision.
Life insurance vs income protection insurance is a tricky choice that every mum must face. As a mum, making sure that your children are financially supported whatever life throws your way is one of the biggest responsibilities you will face. And both life insurance and income protection are very valuable to mums.
Life insurance and income protection insurance offer a security blanket for mums and their families. But should you invest in both? And if not, which one is best? In short, every mum is different and their individual circumstances will dictate whether life insurance or income protection is the best option.
In this guide, we’ll explore the key differences between life insurance and income protection as a mum. Scroll on to learn more
Life Insurance vs Income Protection as a Mum: The Key Difference
The major difference between life insurance and income protection a mum should be aware of is when and how the two policies pay out.
Life Insurance generally pays out a lump sum in the event of a mum’s death, whereas income protection pays out a percentage of a mum’s salary on a monthly basis when they are unable to work for a prolonged period of time due to an illness or injury.
Both life insurance and income protection insurance have their merits and which one is right for you as a mum will depend entirely on your personal circumstances and preferences.
Life Insurance vs Income Protection as a Mum: Other Notable Differences
The below table highlights a few more of the differences between life insurance and income protection for a mum.
INCOME PROTECTION
Usually more expensive monthly premium (£10-£80 per month).
Choose between short or long-term cover (this means how long you’ll receive payments the for).
Typically covers 70-75% of your usual salary.
LIFE INSURANCE
Usually cheaper monthly premium (£5-£110 per month).
Choose between term-based or whole-of-life cover.
This is decided by you upon taking out the policy and can be anything up to £1,000,000.
Life Insurance vs Income Protection as a Mum: What To Consider
Here are a few things to think about when deciding whether to take out life insurance, income protection insurance, or both as a mum.
- Take a closer look at your budget and work out which type of insurance is affordable.
- Existing Debts: Your mortgage and any other outstanding debts you may have will still need to be paid in the event of your death or incapacity to work.
- Monthly Outgoings: Utility bills and food shops are all unavoidable expenditures for mums. You may want to ensure these are covered whatever the eventuality.
- Educational Costs: Things as simple as equipment, uniforms and books will all need to be covered no matter what too.
- Childcare Costs: Whether it’s nursery fees, before and after school clubs, or extracurricular and holiday club costs, all these need to be factored in when making your decision.
- Your income. Think about how important your income is to your family as a whole.
Once you’ve considered all of the above, you’ll be in a better position to decide between Life insurance and income protection insurance as a mum.
Life Insurance vs Income Protection as a New Mum
New mums face a lot of first-time challenges. Along with adjusting to becoming a mum and learning how to navigate a world of nappies and night feeds, you’ll be looking at whether life insurance or income protection is the best option for you.
As with all mums, new mums will need to think their personal circumstances through thoroughly before deciding which works best for them. Both options offer plenty of benefits. Thinking about the things we’ve outlined above will help you decide whether investing in life insurance, income protection insurance or both is the right call for you.
Life Insurance vs Income Protection as a Single Mum
As a single mum, you may be solely financially responsible for your child. For a single mum, both life insurance and income protection insurance are a good investment. Both policies act as a financial safety net. However, purchasing both policies may not be viable for a single-income household.
Life Insurance vs Income Protection as a Stay-At-Home Mum
Stay-at-home mums will need to think about affordability when it comes to choosing the best life insurance policy. How much can you realistically afford to pay on a monthly insurance premium? Let Mummy Insurance compare your options and choose a policy that’s affordable for you.
Income protection insurance isn’t necessary for stay-at-home mums. But life insurance definitely is. Think about how many household chores a stay-at-home parent is responsible for every single day. And all of it unpaid. From childcare to cleaning and cooking, a stay-at-home mum shoulders the vast majority of a household’s responsibilities. And if you were to die, who would do all that unpaid labour?
A life insurance pay-out can help with a reduced income should your partner suddenly have to navigate parenthood alone or find the funds for additional childcare costs.
Life Insurance vs Income Protection as a Working Mum
A working mum may consider income protection insurance their best option as it supplements your income. That said, the best life insurance for a working mum will again depend on personal circumstances.
Consider whether you’re the breadwinner in the household. If so, a policy that offers income protection alongside your life insurance could be ideal. This will ensure that your family receives a lump sum in the event of your death while giving you the peace of mind that your income will be supplemented should you suffer an injury or illness that leaves you unable to work.
Why Secure Life Insurance & Income Protection as a Mum with Mummy Insurance
At Mummy Insurance, we’re dedicated to delivering quotes from all top UK insurers. We’ll also help you to conduct a full comparison between both life insurance and income protection cover. All of our quotes are personalised and our experts are always on hand to help guide mums through the entire process from start to finish.
