If you’re approaching retirement, you should ensure your children have sufficient insurance.
What are the benefits?
By using this strategy, you could:
- ensure your grandchildren receive the financial support they will need if your children die, become disabled or suffer a critical illness, and
- protect your retirement plans.
How does the strategy work?
As you approach retirement, you have many wonderful things to look forward to. However, life doesn’t always work out as you planned. Imagine what would happen if your son or daughter died, became disabled or suffered a critical illness and they didn’t have adequate insurance.
Probably the last thing you’d expect to cope with would be taking on a parental role again, but for around 22,500 Australians this is something they’re already experiencing. To minimise the impact this could have on your financial position, you should find out whether your children have implemented suitable protection strategies.
If not (and they are not in a financial position to do so) you may want to pay for additional Life, Total and Permanent Disability and Critical Illness insurance on their behalf.
Your financial adviser can help you protect the ones you love, as well as help you achieve your retirement goals. They can also review your family’s insurance needs over time to help make sure they remain suitably covered.
Harry and Judy retired last year. After many years of hard work and planning, they had built up a sizeable nest egg and had many things to look forward to, including an extended trip around Australia.
But just as they were settling into this new stage in their lives, the unthinkable happened. Their eldest son, Simon, had a brain haemorrhage and passed away. To make matters worse, because he was young Simon had not seen the need for Life insurance and left his wife Nicole and three children without any means of financial support.
Like many caring grandparents would do, Harry and Judy decided to take Nicole and the kids into their home. But they quickly found this had a devastating impact on their financial situation.
 ABS: Family Characteristics, Australia, 2003. Source: MLC