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Free life insurance for parents – is it worth getting?

Post Office Money is offering up to £120,000 worth of cover per parent

Post Office Money is offering free life insurance to parents with a child or children aged four or under.

It only lasts a year, but each parent can apply for one policy per child worth £15,000, up to a maximum of eight children, meaning you could get cover worth up to £120,000 for your family.

Which? explains what you need to know about the offer, how it compares with other products on the market and whether it’s worth taking up.

How does Post office’s free life insurance work?

Post Office Money Free Parent Life Cover is available to parents aged between 18 and 66 with a child or children under the age of four.

The sum assured is £15,000, which is paid out to your loved ones if you die within the term of the policy, which lasts a year.

Each parent can apply for separate policies and get £15,000 worth of personal life cover per child (for up to eight children).

So, if you had three children under four and both parents took out a policy, you’d get £45,000 of cover each for a year free of charge.

The maximum amount of cover is £120,000 for each parent with up to eight children.

The policy is underwritten by the Royal London Mutual Insurance Society Limited and protection starts immediately when you apply online or by phone.

Are there any catches?

To get Post Office Money Free Parent Life Cover you just need to answer three survey questions on safeguarding your family’s future during the application process.

Like other life insurance policies, the policy won’t pay out if you commit suicide or die as the result of attempted suicide. Your family also won’t be able to claim if your death is the result of an HIV-related illness, or if it is linked to alcohol or drugs.

How does it compare?

Post Office Money isn’t the only insurer to offer free life insurance to parents with young children.

Aviva has a long-standing offer of free life insurance worth £15,000 for a year available to parents aged between 18 and 44 who have children under four. Each parent can apply for one policy per child worth £15,000, up to a maximum of eight children.

Legal & General also has a similar deal that’s been around for a while, which offers £15,000 of cover for 12 months but for parents between 18 and 45 with children up to the age of five. We asked Legal & General to confirm how the cover increases by the number of children but it has not yet responded.

The Post Office Money policy in comparison is available to a bigger age range of parents.

Remember that you may already have some cover to protect your family through your workplace. Some employers offer death-in-service cover, which is a form of insurance that pays out a lump sum of around four times your salary if you die while working for the firm.

Is £15,000 enough cover?

£15,000 worth of cover if you have one child is a great start, but the reality is you’ll probably need a lot more than that to protect your family if the worst happens.

Post Office Money estimates that it costs £230,000 to raise a child to the age of 21, which means you may want to look for a policy can provide at least this.

And that doesn’t factor in the cost of a mortgage, which your loved ones will need to take care of if the worst happens.

Is it worth taking out free life insurance?

Free life insurance is a good chance to get something in place if you haven’t had time to set something up.

With the Post Office Money Free Parent Life Cover you don’t have to take out another product and there’s no need to hand over any bank details. So it won’t cost you anything to sign up.

Just don’t fall into the trap of assuming the policy will offer enough cover for your circumstances.

As everyone’s financial situation is different you may want to take out some professional advice to check how much cover you need for your situation and to find a more long-term deal.

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