Life Insurance for the Stay at Home Parent 22/08/2007 - By Lesley Russell
Life Insurance for Parents
FamilyConnect.com.au
Life insurance for the stay at home parent is often overlooked. Sixty per cent of Australian families with dependent children do not have enough life insurance cover to look after their loved ones for more than one year if they were to die.
“Why do you need life insurance?” was not the response I was expecting from my partner when I broached the subject of managing the risk of financial loss through death by taking out life insurance.
Take a deep breath, I thought to myself. “Because I’m valuable,” I replied. “Irreplaceable even,” I joked.
“Huh?” was the puzzled reply. “I know that.”
“Yes, it would cost a lot of money to hire someone to do take on the tasks that I do as a stay at home mum. Not to mention the time that you will need to take off work to manage the household should anything happen to me.”
“I still don’t understand,” he said. “Can we afford it?”
Unfortunately, at that stage our family was one of the 60% of Australian families with dependent children that do not have enough life insurance cover to look after their loved ones for more than one year if they were to die. (Source: TNS Research, Investigating the Issue of Underinsurance in Australia, August 2005).
Sadly, in our economic driven society, our worth is determined by our paid income - our monetary value. Often, when a parent stops working to stay at home, we don’t alter our personal and family financial situation to cover the gap in protection that evolves when paid super and insurance stops.
Sometimes it is overlooked, sometimes it gets placed in the ‘to do’ pile, other times it is deemed not important.
Unfortunately, mothers and fathers die. I know – my mother died when I was a teenager making our family one of the 4,400 Australian families dealing with the loss of a dependant parent each year (Australian Bureau of Statistics).
So, take action to consider the protection of your loved ones today:
1. Learn more – read Smarter Insurance, Protect Your Assets and Secure your Future, a free Australian consumer guide on insurance.
2. Consult an expert - Contact your local family friendly financial advisor for advice and quotes. They know where to look to find the best product and price for you and advise you every step of the way making the process hassle free and not complicated.
I followed these steps and it’s a relief to know that my family will not be placed in financial hardship should anything happen to me. I contacted an independent financial advisor and within a week I was better educated about my insurance options. Importantly, my family wealth is now protected - all at a rate our family budget can afford.
Remember Benjamin Franklin’s infamous words: - In this world nothing is certain but death and taxes. Let’s add to that – nothing is certain but death, taxes and your family’s financial wealth – if you do something about life insurance today.
This article was compiled with assistance from Andrew Maciejewski of A and S Planning and is provided for informational purposes only and does not provide professional advice. Seek professional, independent financial planning advice to satisfy yourself of the appropriateness of any action or investment.
