People take out life insurance policies for various reasons. For most, life cover helps to protect their loved ones financially should they pass away. But what happens when you’re a stay-at-home parent with no paying job. Should you worry about getting a life policy for parents?
The short answer is YES. Most people assume that life insurance is a preserve for income-earning parents. But nothing could be farther from the truth.
Think about the support that stay-at-home parents offer to their family. If anything were to happen to your partner, say, severe illness or demise, it would cost you a fortune to fill the void left.
In this post, we discuss:
- How stay-at-home parents provide financial support
- Why life insurance is a must-have for these parents
- Different life insurance policies to consider as a stay-at-home parent
Let’s get to it!
How stay-at-home parents provide financial support
If you’re still sceptical about getting life insurance for your stay-at-home partner, then you’ll probably change your mind after discovering the amount of support they provide. True, they don’t bring a pay cheque or contribute to the family’s savings, but one thing’s for sure. If the support they provide were to be monetised, it would amount to a substantial figure.
We’re talking about:
- Taking care of children
- Preparing meals
- Running errands
- Taking children to and from school
- Maintaining the house
- Cleaning and laundry
Now the question is, if anything was to happen to your stay-at-home partner, would you be able to assume these roles? You bet not! Mixing (income-generating) work with home duties is never easy for anyone. In fact, you may need to hire a nanny or pay for day care services which is a pretty huge budget.
The good news is you can take out life insurance and use its benefits to take care of the cost of childcare and similar expenses should anything happen to your stay-at-home partner. That would help to maintain a comfortable life despite the loss.
Life insurance – a must-have for stay-at-home parents
Besides covering the cost of childcare, life insurance for stay-at-home parents also comes in handy in various ways when the unexpected occurs. For starters, the policy’s payout acts as a safety net that relieves your loved ones of the financial burden upon your demise. The beneficiaries could use the benefits to take care of various needs including:
- Funeral expenses
- Daily living expenses
- Planning for the future
- Mortgage repayment
What policies are available for stay-at-home parents?
The most suitable life insurance policy depends on your specific circumstances as a stay-at-home parent. What exactly do you want to protect? Is it your mortgage, final expenses, school fees, or everyday living expenses? Whatever you may have in mind, there’s a suitable life insurance policy for you.
Here are a few plans you may want to consider:
Level term life insurance
Level term policy pays out a lump sum amount if you pass away within the contract period. Usually, the policyholder decides the length of the policy as well as the amount of cover they want.
So you want to carefully evaluate the financial obligations you may need protection for as a stay-at-home parent. For instance, if you want to guarantee your children’s higher education, level term is the go-for insurance as they could use the support to finance their school fees.
Family income benefit
Like level term insurance, this policy offers financial support if you pass away during the contract period. However, instead of a lump-sum, the payouts come in monthly instalments, just like a regular income. This enables your surviving partner or beneficiaries to manage the funds more decisively in covering such expenses as childcare, paying for a nanny, and meeting daily needs.
Critical illness cover
Critical illness cover provides a lump sum support to ensure that you’re financially protected during diagnosis, treatment, and recovery from a critical condition. Most life policy providers allow you to include your children in the policy to keep them protected if they get diagnosed with a particular disease.
Conclusion
At this point, we hope you now appreciate that getting life insurance for a stay-at-home parent is as crucial as taking out one for the family’s breadwinner. The policy’s benefits can come in handy in case of demise or critical illness, and your surviving partner may use the payouts to afford childcare, final expenses, a nanny, school fees, among other costs.
Have any questions or feedback regarding insurance for stay-at-home parents? Feel free to share with us in the comments below.
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