My child is at an independent school, what financial cushions are available to me?
- School Fees Trust Scheme Life Insurance
- HM Forces Trust Scheme
- Personal Possessions Insurance
- Absence from School Insurance
Why Would I Insure School Fees?
How many parents have considered the effect on their child’s life, if they were to die? The thought is too gruesome to contemplate, let alone think about what would happen if both parents died.
We are all too prone to quickly dismiss such thoughts from our minds as a remote possibility. Therefore, few people make any plans for such an eventuality. But in a world full of natural disasters, major accidents and terrorism, such a tragedy can not be discounted.
In the past, it was naturally assumed that you would look after your parents in the final years of their life and, similarly, there was an understanding that they would look after your children, if something happened to you.
It is fair to say that simple geography has played a part in changing the nature of this equation and nowadays the dispersal of families across the country, and indeed around the world, would often make this an impractical arrangement. After all, at a time when a child has just lost one or both parents would anyone consider tearing them away from the support of their school friends and teachers?
So what responsibility do you think your friends and family would take in the event of your children being left without parents?
The first thing to do is for both parents to make a will. This way you will not die intestate, which can have a disastrous affect on your estate. In your will you can designate who will look after your children and how that will be managed. It is better to use a specialist solicitor and tax adviser to ensure that the drafting is done correctly with no loop holes.
You should consider appointing a guardian to look after your children if they are under 18. This would usually be the surviving parent. But if both parents die at the same time, it would be better to appoint another member of your family, a close friend or godparent as a legal guardian. Unmarried fathers do not become guardians as of right, unless the mother specifically appoints them.
Godparents are often enlisted by the family to carry an element of responsibility, particularly in the child’s education. This was certainly true fifty years ago, but is not so today. Now the expectation is more on their making arrangements in this event, rather than taking care of things themselves.
On the financial side, you should ensure that your life insurance is sufficient to pay off your mortgage and any other credit card and hire purchase debts.
But what if your legacy does not cover other expenditure like school fees? With nearly £7,000 per term on average for a senior boarding school, these could well mount up to over £105,000 for that phase alone. Grandparents, friends or family members could not be expected to add this to their outgoings and for most it would be an absolute impossibility.
The trustees of your estate have power to pay money to the guardians for their maintenance, and general upkeep of your children, but remember, they are under no obligation to send them to an independent school and therefore if funds are not available, your child will most likely have to move to a state school.
It is possible, however, to ring-fence future expenditure on school fees with a tailored life insurance which pays tax free benefits direct to your child’s school, thus ensuring your child continues the education you had intended for them.
At some stage you will need to talk to your children about what may happen if you can no longer take care of them. This will be a very difficult thing to do, and may be upsetting for all of you. However, involving children in decisions and helping them to understand something before it happens can help them (and you) cope better with such eventualities.
In summary, you should always assess your financial situation on a regular basis, as well as checking your will, to see that they are adequately aligned with your children’s needs and your objectives.
Life insurance for the armed forces
Sterling Life Insurance have done a good job in getting a life insurance package for members of the Armed Forces across the Line of Departure, but their insurance is primarily geared to paying off a mortgage in the event of death. So how can service personnel protect their school fees? These could total over £200,000 per child over 10 years. Many service personnel have their children in independent schools, made possible through the contribution of the Continuity of Education Allowance (CEA), which is paid by the Ministry of Defence (MoD). Recent changes to policy made by the MoD mean that in the event of death of a member of the Armed Forces on operations, the remaining parent would receive the CEA up to a child’s 18th birthday, but this might still leave them with a funding gap for the difference in fees, which could be as much as £3,000 – £4,000 a term for a boarding school.
So how can we solve that gap?
SFS Group Ltd has been providing life and critical illness insurance for Armed Forces’ parents whose children are at independent school since 1990 without any hassle and without any discrimination in treating them differently to civilians. To us, it does not matter whether you are Special Forces, Logistics, Aircrew or a Nuclear Submariner. Nor does it matter to us if you are serving in Bulford or Basra, Hounslow or Helmand. It does not affect your premiums. There are no pre-medicals and no lifestyle questions about booze or cigarettes – the only declaration you need to make is any pre-existing medical conditions that you have had in the last 5 years. So long as your child/children are in independent education when you join the scheme, it will pay all school fees up to the child/children’s l8th birthday, if the insured member of the Armed Forces dies whether that the death occurs on operations, in a road traffic accident or through a terminal illness. The school fees even go direct to the school, so that the remaining parent is not bothered with all the administration. We take care of that. Peace of mind in an uncertain world.
How do I sign up?
All you do is click on this link, select the level of cover you require against your age and fill in the electronic form. You do not even have to tell us your occupation, but if you do, it helps us to keep our products and services relevant to your needs. Alternatively, you can ring our number between 0830 and 1730 hrs Monday to Friday and ask for an application form to be sent to you or email us at email@example.com for more information.
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The Most Important Decision You Can Make For Your Child
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