Maintenance payments can make a huge difference to the expense of bringing up a child by a single parent especially when there is little opportunity to work either full or part-time.
Both parents may understand the importance of taking out some form of cover so that if the person paying the maintenance is unable to work due to illness, injury or even death, the maintenance can continue.
Unfortunately this is not always the case and insurers recognise a need for people to take out cover on someone else’s life.
It is possible to take out cover on the ‘Life of Another’.
The person receiving the maintenance can take out cover on the life of the person paying the maintenance.
The person receiving the maintenance would own the policy and be responsible for making the monthly payments and in the event of a claim they would also receive the money.
Some cooperation is needed between both parties because this type of cover is medically underwritten and the person being covered will need to answer medical questions and may need to sign paperwork.
Cover can be set up to pay a regular monthly amount.
The type of cover suitable for protecting maintenance payments is known as ‘Family Income Benefit’.
It can be set up to pay a regular monthly amount for a fixed number of years. Cover can remain fixed or ‘level’ or if can be linked to inflation and increase over time.
Maintenance payments are often related to a child’s age and continue until their 19th birthday (depending on any agreement that may be in place) but there is no such restriction on the term of an insurance policy and cover can continue throughout higher education and beyond as long as the person being covered is eligible.
Why not contact us to speak with an adviser about the available options.