Fathers expecting a new family addition may have sold their endowment policies

Publication date | 23/02/2010

Soon-to-be fathers may want to make sure their finances are in check for the arrival of their child.

The short-term cost of a baby can prove expensive, but when long-term expenses are taken into account - such as nursery and private primary school fees - it could highlight just how much starting a family can cost.

Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment policies - said some of its customers had decided to sell their underachieving endowment policies in order to raise the money required for raising a family.

Making sure household finances are in a strong position

Many fathers may decide to take paid paternity leave to help out their partners with new arrivals.

Those parents who decide to take quite a large break from their careers may need to make sure their finances are strong enough to handle the reduced household income.

A new report from the Department for Business, Innovation and Skills found that over 90 per cent of dads with children aged five and under think it is important to take paid paternity leave.

However, a fifth of fathers with offspring aged 16 and under do not know if their employer offers flexible working to dads, despite them being legally entitled to it.

"We know that rights for dads at work are valued by people and that businesses also see real benefits in offering them. But our research shows that there are still some dads out there that are not aware of what they are entitled to and therefore risk missing out," said employment relations minister Lord Young.

The cost of staying at home to look after a new arrival could take a toll on household finances, but many fathers may prefer this than missing out on the first few months of their child's life.

Selling your endowment could be an option you have considered

Mr Radford, from aap, said some of its customers who were expecting new arrivals had decided to sell their unwanted endowment policies in order to cover the cost of taking paternity leave to enjoy their new family.

He added that should aap make an offer to purchase an endowment, it will always pay more than the surrender value offered by the insurance company.

Reasons to sell your endowment policy