A comfort blanket to cling to in case you're carrying twins
With more people having multiple births, you can now buy cover before the first scan to ease the financial strain. Laura Harding and Julian Knight report
Sunday 13 April 2008
With the patter of tiny feet comes the gurgle of money being washed away. As any parent knows, having a family can create a massive drain on resources as the children grow older. Now imagine the extra pressure on personal finances of giving birth to twins, triplets or, in very rare cases, even more little bundles of joy.
But if that prospect seems daunting, there is at least a comfort blanket you can cling on to. Mums- and dads-to-be can now take out multiple-birth insurance, giving them a cash payout in the event they have more than one baby.
And the chances of this happening are greater than you might think. There are around 10,000 multiple births in the UK every year, equating to one in 67 of all maternities.
Older mums are far more likely to have multiple births and, because as a nation we're becoming parents later in life, that means an increasing number of us are going to be hearing the patter of more than one set of tiny feet.
Prospective parents must take out the policy before the 11th week of the pregnancy – in other words, before the first ultrasound scan – and the cost of the insurance is calculated according to certain details about the couple. Those who have had fertility treatment in the past two years are not eligible to apply.
"The age of the expectant mother and her family history, and the history of the father, can increase the cost of the premium," says Dean Atkin from Marcus Hearn, an insurance broker offering a multiple-birth policy. "The minimum cost is based on someone up to the age of 24 with no record of twins."
In this minimum-cost category, according to Mr Atkin, the one-off premiums range from £84 (for a £2,000 payout after the birth) to £210 (for a £5,000 payout). At present, payments are capped at £5,000.
However, for older parents and those with a family history of multiple births, premium costs can be far higher – in some cases, many hundreds of pounds.
"As the expectant mother gets older, this adds to the increase in the costs," Mr Atkin confirms.
Marcus Hearn sold 125 policies in 2007 and paid out three times; so far this year, it has sold between 40 and 50.
"I certainly think our insurance is good value for money," adds Mr Atkin. "We launched the policy to assist with the cost of bringing up two babies instead of one, which can be substantial. The latest figures show that the average cost of raising a child up to the age of five can be as much as £20,000."
But Peter Gerrard, head of insurance research at price-comparison site Moneysupermarket.com, is far from convinced of the worth of this "quirky" insurance. "There is a massive chance you won't have them [twins]," he argues.
"When you look at the statistics of how much it costs to have kids, for the sake of a £5,000 payout, I would say put the premium money into a high-interest savings account and then take that money and use it for baby costs."
David Kuo, head of personal finance at financial comparison site fool.co.uk, is even more scathing about the worth of multiple birth insurance. "You're better off putting money on the horses," he says. "If you know there's a history of multiple births in your family, then make a contingency plan yourself because it's just not worth it. Start putting money to one side in a savings account or, if you're prepared to take those kinds of risks, into a stock market unit trust fund, and it will add up."
He adds: "I'd stick to essential policies like motor and building insurance."
A gamble pays: baby cover 'takes the pressure off'
Liz Elkington, 34, a TV producer and director from London, took out insurance for the possibility of a multiple birth because she was a twin herself.
The gamble paid off when Liz and her husband Chris, 34, an accountant, had twin boys, Bailey and Reece, in July last year.
They paid a £700 premium to broker Marcus Hearn soon after Liz found out she was pregnant. The cost was higher than usual due to her history. At the three-month scan, Liz was told she was going to have twins. And when they arrived, she received a cheque for £5,000.
This windfall came in very handy. "It's kept us in nappies, milk – everything you double up on with twins," says Liz. "When we found out we were having twins, we were delighted, but we never budgeted for it. It's not a massive amount we received but it's enough to take the pressure off."
The couple say they would not hesitate to take out a policy again if they decide to have more children. "The babies are amazing, so if they would be anything like them, I would like to have more. The older you get, the more likely you are to have twins, so I would definitely take out the insurance."
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