Life insurance isn’t just for the breadwinner; it’s a very necessary product for parents who care for their children on a full time basis. Can you even begin to think of how your children would be cared for if you were no longer around to look after them? It’s not just basic child care but the running of the home. The school runs and visits to the dentist and so on – not to mention the times when children are not well and need that little bit more care. No-one like to think about this, but surely we all know of a family that’s been devastated by the death of a parent.
Mums are valued at an unbelievable amount – but then they do an unbelievable number of hours, too. A recent survey reckons they’re worth almost 33,000 pounds a year. That’s the amount that would be needed to get someone else to do all the domestic chores and childcare that Mums do as a matter or course. So, if the breadwinner and chief wage earner being covered by life insurance is a sensible idea, why not the person who runs the home and looks after the children? It seems that nearly 50 per cent of these Mums have no insurance cover whatsoever.
Apart from traditional life insurance, where a lump sum is paid on the death of the person insured, there are other schemes to consider. Family income benefit costs rather less than life insurance, due to the way its run. Benefits can be linked to inflation to keep up with rising costs. On the death of the insured a monthly or annual amount is paid out, through until the end of the term of the insurance.
This would cover the costs of childcare should the worst happen, but critical illness cover or income protection insurance would be an excellent way of arranging cover is the chief carer became ill or was involved in an accident and was not longer able to look after the home and children. Typical critical illness cover is designed to pay out a lump sum on a person’s death or on being diagnosed with a critical illness during the term of the insurance. The amount of cover is fixed for the duration of the policy.
The illness covered by the scheme would be clearly set out in the policy document and if were diagnosed with any of these illnesses you would draw a lump sum. This could be invaluable for child and domestic care and any expenses suffered during your illness. You may need alterations to your home, too, to enable you to cope in the event of disability.
The other product which could be invaluable is an income protection policy. Although primarily designed to ease financial pressure if you were unable to work because of sickness or injury, it can also be used in the case of stay-at-home parents. Typically it will provide a monthly payment of up to 80 per cent of your income if you’re incapacitated due to illness or have been injured to the degree that you’d be unable to work.
As any parent will tell you, bringing up children is a job in itself. In the case of a stay at home Mum, or even Dad, life would be very different if they were unable to fulfil the role. It’s very well worth looking into what types of insurance are available and then you can ensure that this care can be continued as far as possible, without the added worry of financial matters.
