What’s expected nowadays?

Hand reaching money on tree-418If you’re a parent or grandparent you may be surprised to know, around a third of people we discuss personal risk insurance with are planning on you being their financial backstop should they be unable to work and earn an income or die prematurely. When we discuss adequate cover with them often the response is “Mum and Dad will look after us if anything happens.” This is what we hear not just from young couples getting started in life, but also people well into their 40’s and 50’s. When challenged, we rarely find this conversation has been had with the older relatives in question and that these “adults” are making a very large financial assumption.

The financial and personal consequences of having to bring up a second family because your adult children have not made adequate provision doesn’t bear thinking about. Here are a few tips to help you avoid being the ambulance at the bottom of the cliff:

  1. Have a conversation with your children about their insurance provisions.
  2. Ask them what they would expect from you if you outlived them in respect of guardianship of their children
  3. Ask if they have addressed the issue of guardianship in their Wills and how recently has this been updated.
  4. Advise them to appoint guardians who are of a similar age as they are more likely, when needed, to be above ground than you are.
  5. If your adult children are going through financial hardship, consider paying their personal insurance premiums for a while to help them out or
  6. Give some thought to taking out personal life, trauma and income continuance insurance on your adult children by paying the premium(s) and owning the policy(s).
  7. Recommend that they get good advice from a skilled competent adviser.

It is easy for your adult children to take the “it won’t happen to me” approach or assume you will always be there for them. In generations past it was not uncommon for grandparents to bring up grandchildren. In fact, in many cultures it is still common practice. The modern nuclear family is not designed to cope with this. If your progeny have this expectation, tell them that if you get dementia you will expect them to look after you if they hope to get an inheritance. The look on some of their faces will be telling if not priceless. Have the conversation and get good advice. That is what we are here for.