The Impacts of disability
Research highlights the protection life insurance can provide families
One of the most rewarding things about being a financial adviser is seeing the positive impact an insurance policy can have on a family’s life.
That’s why I was particularly interested in the findings from a recent study that explored the impact the sudden disability of a parent has on children and the other parent, comparing both insured and uninsured households.
I wanted to share some of the key findings with you as I think they help illustrate why life insurance is so valuable for families.
What impact does the sudden disability of a parent have on children?
The study found there were wide-reaching impacts on children. For example, among the children in the study:
Many children were forced to grow up faster than they would have otherwise, and unfortunately this often comes at the expense of their social lives and their studies.
It’s worth noting that the parents surveyed often underestimated the impacts on their children, so the changes are not always obvious.
The study also highlighted some worrying trends with children’s mental health, with 30% of the children studied experiencing anxiety/panic disorders, depression or abusing drugs and alcohol.
How does having life insurance help?
Among these upsetting findings, it’s heartening to see that life insurance had a significant impact in helping families cope with the loss of a parent.
The most obvious impact came from an increased level of financial stability for those families who had cover in place.
Among families without insurance, the percentage who rated their finances as ‘struggling’ jumped from 11% to 62% after the parent became disabled. By contrast, among families’ Impact of parent’s disability on the family’ – Research conducted by Ipsos, prepared for ANZ Global Wealth, June 2015 with insurance, the percentage of families who rated their finances as ‘adequate’ increased from 36% to 42% after the other parent became disabled.
This financial stability had a flow-on effect to other aspects of the family’s situation. Families with life insurance were more likely to stay in the family home and increase the amount of time they spend together, plus the carer parent was able to reduce working hours to look after their partner and children.
Keeping your options open
Whether it’s something as life-altering as a parent becoming disabled or an illness you can recover from, it’s always nice to have the financial freedom to make the best choices for yourself and your family. That freedom is why life insurance is such an important and valuable asset.
