Do Empty Nesters Need Life Insurance?

Last updated: 08/06/2023 | Estimated Reading Time: 8 minutes

There are moments in our lives that are so monumental that they become some of our most precious and important landmark memories. For example, getting married, buying a house for the first time, or the birth of your children are just a few of these core moments that can completely change your life and redefine your priorities. 

And while all of these memories are justifiably important, it’s the act of bringing a child into the World that truly puts the meaning of life into perspective. You instinctively want to raise and protect them with all of your might, whether that’s emotionally or financially.

It’s at this monumental point in life that many people will usually look into life insurance costs as they begin to apply for a life insurance policy.

In This Guide:

Questioning the Need for Life Insurance when the Kids Move Out

Inevitably, there will come a time when your kids become fully grown adults who have moved out in order to live their independent lives  or pursue their own dreams. At times like this, you may reassess a few of your priorities in life and consider whether or not they’re still worth keeping, including your life insurance costs. 

As stated above, the main motivator for most life insurance policies is to help protect your children should the unexpected occur. But once your children have moved out of the family home and started their own lives, is there still a need for a life insurance policy and the cover it can offer to you and your loved ones?

Why Some Empty Nesters Choose not to Renew or Take Out a Life Insurance Policy

Most parents who have seen their children move out find themselves in one of two categories. The first category is parents who took out a life insurance policy and are questioning its worth now the kids are gone, and the second category is people who were planning to take out a life insurance policy, never got around to doing so, and now aren’t sure if there’s any point in doing so. 

Other reasons for potentially not renewing or taking out a policy are listed below.

  • You’d like to remove the financial obligation of life insurance costs 
  • You assume that life insurance isn’t needed after the kids move out
  • You don’t see how a life insurance policy can continue to be of use to you 

How Life Insurance can Continue to help Empty Nesters 

For some empty nesters, choosing not to take out or renew a life insurance policy may be the right decision for their own specific needs. However, before making a final decision, it’s essential to understand the 3 main benefits of life insurance and how it can continue to help some empty nesters. 

1. Continued support for your children 

Do parents ever really stop worrying about their children or wanting to provide for them, no matter how old they are? In fact, many parents will openly admit to still offering up some form of financial support to their kids even after they’ve moved out. 

This support can come in many forms, whether it’s student loans, helping to secure a place to live, or continuing with a life insurance policy that’ll help secure a comfortable future for them if the unexpected occurred. 

2. Providing support and security for a spouse 

Putting the needs of the kids to one side for a moment, empty nesters still have their own financial goals to meet when it comes to paying off their mortgage or building a nice little nest egg to enjoy later in life. In fact, most parents will continue to work for many years after their children leave home. 

While this means more money can potentially go into paying off the house or towards your retirement savings, it also means taking the time to consider your own future together. If one of you should pass away suddenly, life insurance can help to keep the survivor more secure financially. 

3. Helping with any outstanding debts

Speaking of your significant other, the majority of couples will inevitably have debts and repayment plans still in action. For things like loan payments, mortgages, and other regular repayments, this can mean that any outstanding debts become the sole responsibility of your spouse or joint account holder in the event of your death. 

No one wants to plan ahead for the worst-case scenario. However, putting the right life insurance plan together can help to protect your loved ones from this heavy debt. 

Finding the Right Life Insurance Policy for your Needs

So, which life insurance policies are there that can offer you some, if not all, of the above benefits? And how can you be sure that you’re finding the best possible cover for your specific needs? 

Below is a summary of some of the policies available to you and how they may be of use to help you find the cover you need. 

Please Note: Not all insurance providers we work with offer all types of policies. Please do your research and compare quotes before proceeding.

Over 50s Insurance 

A life insurance for over 50s policy could be more useful for expenses that come from end-of-life situations like funeral costs. Because it's a whole-of-life policy, life insurance for over 50s tends to pay out when a policyholder passes away. 

This type of coverage comes with a guaranteed acceptance, so every applicant that applies for life insurance for over 50s will get one, all without the need for examinations and medical questions. For these reasons, life insurance for over 50s can be a great potential choice for empty nesters with pre-existing medical conditions who wish to help their loved ones after death. 

Income Protection Insurance 

A sudden and unexpected loss of income can be an awful burden for a family. But with income protection insurance, you can prepare for the unexpected and make sure there’s always money coming in. Income protection insurance pays out a regular income if you unexpectedly become unable to work due to disability, illness, or a long-term injury. 

While you may be entitled to statutory sick pay, you can incur significant financial problems if your illness or injury lasts longer than your allocated sick pay. For empty nesters with dependants and bills to pay, it’s a worrying issue that income protection insurance can help with.

The amount paid and other specifics of an income protection insurance policy will depend on the kind of policy you choose and your employment status (self-employed/full-time employment, etc). Payments will usually last until retirement or even death, depending on the policy you choose. Be aware that income protection insurance payouts are on a monthly basis, unlike the lump sum payment that a life and critical illness cover policy may offer. 

Redundancy Insurance 

If redundancy insurance sounds similar to the income protection insurance option listed above, it’s because redundancy insurance is essentially a different type of income protection insurance. 

Redundancy insurance is also sometimes referred to as unemployment insurance. As the name suggests, this type of cover provides you with financial support in the event of redundancy from your place of employment. This financial support tends to be a tax-free monthly payment for up to 12 months after involuntary redundancy, although this timeframe depends on the type of policy you choose. 

For empty nesters, redundancy insurance provides relief that helps them to maintain mortgage payments and other debts until another job is found. Monthly payments tend to be around 70% of your previous wage, but this isn’t a one-size-fits-all rule. Be aware that redundancy insurance won’t be applied to circumstances where the policyholder knows that redundancy is forthcoming. Instead, redundancy insurance is used on a ‘what if’ basis. 

Mortgage Protection Insurance

Mortgage protection insurance, also commonly referred to as mortgage life insurance, is essentially a life insurance option that helps to pay off any due mortgage debt when you pass away. Generally speaking, your mortgage protection insurance premium will be calculated based on the following criteria: 

  • The amount owed on your mortgage 
  • The length of the mortgage protection insurance needed (this will usually be the length of the mortgage itself) 
  • The policyholder’s age, health, and overall lifestyle 

Some people may also add things like Life and Critical Illness Cover to their policy, which can also affect the premiums of a mortgage protection insurance policy. This additional level of cover can help policyholders to protect their loved ones in the event of their death and any unexpected critical medical diagnosis 

Mortgage protection insurance can be taken out as a joint policy, but while it may seem cost-effective to do so, it’s important to understand this will only provide one single payout. There’s an option also to take out two separate policies that will offer two separate payouts in the event of death. 

Empty Nesters and Life Insurance: Final Thoughts

For the majority of parents or legal guardians, watching the kids move out and begin their own journey into adulthood can be a source of great contemplation about the future. But it’s always important to consider your own future, as well as the well-being and financial security of your children.

While the information above can help you to see what life insurance can offer you at this point in your life, only you can truly decide which policy is best for your needs. As long as you’re informed and understand what’s available to you, the future can be more secure and stress-free.