There is no doubt about it - being a stay-at-home parent is a full-time gig!  You are a multi-tasking extraordinaire combining the roles of teacher, counsellor, chef, housekeeper and peace maker!

And all of this adds up - you would be contributing tens of thousands of dollars of unpaid (and let's be honest here, often unrecognised) work to your family every year.

So, what would happen to the clan if all that stopped and the circular family unit ceased to spin neatly on it's axis? 

If your family includes a non-working parent, it’s worth thinking about how you would cover their significant household contributions – because even though they don’t bring home a pay check, if they suffer an illness, injury or pass away it would be devastating emotionally but possibly also financially. Life and trauma insurance are well worth considering for parents at home. 

 

To offer some guidance we have listed below three things you might need cover for if something happens to the stay-at-home parent in your family.

 

1. To replace the value of their work.

If something happens to a stay-at-home parent, your family may need to make new arrangements for child-care, transport, housekeeping and more, which may mean additional, unplanned-for expenses.

If you’re looking at getting life or income insurance, make sure you’ve considered how you would manage financially if something happened to either parent, including the stay-at-home parent. Life insurance can’t replace a lost loved one, but it will provide your family with some financial security to shoulder the expense of replacing your contribution to the household.

 

2. To cover mortgage and other expenses.

If something happens to the non-working parent, your family’s expenses may go up – to pay for the work they normally do – or your income might go down, if you need to take off work to help around the house or care for the stay-at-home parent.

You might think that if they are not earning an income, they may not need or be able to get income protection insurance but, even as a non-working parent, they might be eligible for mortgage and living cover to help protect your family home if something happens to them. If the stay-at-home parent were to pass away, life insurance cover can help your family settle debts, boost savings, or pay for future expenses like your children’s education.

 

3. To cover additional costs.

If they get injured, become ill or pass away, your family could face major unbudgeted costs. These could range from paying for private or unfunded medical treatment, to modifying your home if they suffer an injury that leaves them with a disability or covering the cost of their funeral. Without cover on the non-working parent, it may be challenging to meet those expenses.

Trauma cover can offer some protection, paying out a lump sum if they suffer one of the specified serious illnesses and injuries that are covered. Life insurance can help pay expenses such as a funeral, or if they are diagnosed with a terminal illness, you might be able to access your life insurance early.

Even though they may not be earning a salary, stay-at-home-parents add significant financial value to their families. If you’re thinking about taking out life insurances, it’s worth considering what cover you need for both parents to avoid any financial hardship if something goes wrong.

 

 Using a cover calculator

A good way to estimate how much cover you may need is to use our cover calculator. 

 

The information contained in this article is of a general nature only. It does not take into account your specific financial situation, needs or goals and is not intended to be financial advice. For advice on product suitability, please contact a financial adviser. For policy terms, conditions, limits and exclusions refer to the relevant policy wording. While The New Zealand Automobile Association Incorporated takes reasonable steps to ensure that the information contained in this article is accurate at the time of publication, the information referred to is subject to change without notice.

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