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Life insurance for carers

If you care for a partner, parent or child, life insurance can pay for the care you provide to be replaced if you die. For a disabled or vulnerable beneficiary, a suitable trust can stop a payout affecting their means-tested benefits. Carers often stop planning for themselves, so income protection or critical illness cover is worth a look too.

The work you do that nobody pays for

Carers give medication, cook, handle appointments, lift, wash and sit up through bad nights. Because the work is unpaid, families rarely think of it as something that would need replacing. If you were not there tomorrow, someone would have to provide that care, and most of the options cost money.

Try to put a rough figure on it. Think about how many hours a week you give, what a care agency or residential place nearby might charge, and how long the need will last.

Some carers also pay for things the person they look after needs, such as heating, transport or equipment. Add those to your figure, since the cared-for person may not be able to cover them alone.

Protecting the benefits of the person you care for

If the person you look after receives means-tested benefits, a lump sum paid straight to them could reduce or stop those payments until the money is spent down. That would defeat the purpose of the cover.

Writing the policy into a discretionary trust, or a trust designed for a disabled person, lets trustees hold the money and pay for things as needed. Trust rules are technical, so take legal advice on the right type for your situation.

Choose trustees who understand the person you care for and the benefits system they rely on. A trustee who knows when a payment might affect support can make the money go further.

Who would step in

Money solves part of the problem. The other part is a person. Talk to relatives or friends about who could take over coordinating care, even if they would pay professionals to do the hands-on work.

Write down the routines, medication, contacts and preferences you carry in your head. Keep that note with your will and policy documents, so your trustees and the next carer start with what you know.

If you care for a parent or partner who owns their home, check whether they have a lasting power of attorney in place. It would let someone you trust manage their affairs if you were not around.

Looking after yourself as well

Caring is physically and mentally demanding. Many carers juggle a reduced job, and some have given up work altogether. If you still earn, income protection can replace part of that pay if you fall ill. Critical illness cover can pay a lump sum on diagnosis of a serious illness.

If you no longer work, life cover and critical illness cover remain open to you. Insurers base the decision on your own health and lifestyle.

Respite matters for your own health as well. If you are feeling worn out, speak to your GP or local carers' centre. A carer's assessment from your local council can also open up support you may not know about.

How Hi Tomorrow helps carers

We listen first. We want to understand who you care for, how many hours you give and what support is already in place. Then we suggest cover from our panel that would fund replacement care and recommend the right kind of trust to look into.

We can work at your pace and around your caring hours, with calls booked when it suits you.

Questions people ask us

Can I get life insurance if I do not work because I am a carer?

Yes. Life insurance does not depend on having a job. Insurers look at your age, health and lifestyle. Income protection usually needs earned income, but life cover and critical illness cover are open to carers who are not in paid work.

Will a life insurance payout affect someone's benefits?

It can if the money is paid directly to a person receiving means-tested benefits, because their savings would rise. Placing the policy in an appropriate trust, so trustees hold the money, is the usual way to avoid this. Get legal advice on the right trust for your circumstances.

How much life insurance does a carer need?

Start with the cost of replacing your care for as long as it would be needed, then add any debts, funeral costs and support for other family members. For a lifelong need, whole of life cover may suit better than a fixed term. A broker can help you test different figures.

Can I take out cover on the person I care for?

Sometimes, if you have a financial interest in their life, such as a spouse or partner, and they consent. Their health will decide whether cover is available and on what terms. In most cases, protecting your own life is the bigger priority for the family.

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