Is Life Insurance Needed For Both Parents?
[social_share]There are plenty of families across Australia who decide to have one parent work outside the home and earn an income while the other parent remains in the home for the purposes of childcare and general household upkeep. Some of these families have no choice but to adopt this plan, due to decreased options with regard to childcare and day care in general. It is easy for people to assume that the parent who goes to work every day and brings home the only income that the family receives should be protected by life insurance. There is little doubt that their death would severely impact the family, not only in terms of emotional grief but in the sharp drop of cash flow as well.
Should tragedy strike the spouse who stayed at home, it is no doubt as emotionally devastating for the family. Furthermore, the loss of the stay at home spouse can extend in other ways, beyond just grief in ways that are similar to how the primary breadwinner’s death might impact on the family. The person who supports the family with daily cooking, cleaning and errand-running is a very tangible and important part of a family’s infrastructure, and can have financial repercussions for the family.
While the family is still grieving and learning how to pick up the pieces, the possibility exists that they could need someone to volunteer their services for the caring of the children and the maintenance of the home. Family members typically rise to the occasion and provide this much-needed support. After some time, however, they will not be able to continue in such roles, and will most likely have to revert back to their normal lives. Depending on professional ‘for-hire’ services is always an option, but at a cost that the family may not be able to bear.
All of this brings to bear the point that the family homemaker fills a vital role upon which the entire family is extremely dependent. And this role, much like that of the breadwinner, carries with it a financial worth. It is a worth that the family loses if the homemaker passes and is not covered by insurance protection.
The Australian Bureau of Statistics released a study entitled, “Measuring the Value of Unpaid Household, Caring and Voluntary Work of Older Australians,” in 2003. The study discovered that the value of a stay-at-home partner between the ages of 25 to 44 who oversaw housework, childcare, shopping and more, was approximately $45,500. The figure was calculated based on the length of time that the homemaker cares for dependants, a range that stretches from birth to 20 years old. When multiplied together (20 x $45,500), the total value of a homemaker’s contributions is in excess of $912,000. Even if the youngest dependent child is older when the homemaker passes away, this amount will be lower but still quite substantial.
For these reasons, it is vital that the stay-at-home parent receives life insurance coverage. Not only will it help the family provide for the costs of the missing parent’s contributions, but it can also go a long way toward helping them to better deal with their collective stress and grief.
