The importance of financial protection for stay at home parents.
There is a misconception that life insurance and income protection are only for those with real or paid jobs. But if you ask any stay at home parent, they will probably tell you their unpaid graft feels very much like ‘real work’. And the research backs this up. A study has shown that stay at home parents work longer and harder than their gainfully employed and better paid partners.
STAY AT HOME PARENTS WORK LONGER THAN AVERAGE PAID WORKER
The research conducted by TAL found that the national army of stay at home mums and dads wash, clean, cook, shop, and taxi their families around for an estimated 39.7 hours a week. This is seven hours longer than the average paid worker. To be exact, stay at home mums and dads cook for an estimated 7 hours and 30 minutes, wash and iron clothes for 4 hours and 24 minutes and clean for 8 hours and 42 minutes a week in addition to the 4 hours and 24 minutes spent walking, washing and caring the four legged family members.
Applying basic economics for a moment and using the minimum wage of $18.70 an hour, if a stay at home mum parent was paid a salary, they would earn $38,604 a year. Looking at it another way, paying someone to work the hours that a stay at home mum or dad works would cost a family a minimum of $38,604 a year. If it were possible to even find home help at minimum wage rate. This is highly unlikely in Australia’s big cities.
So if the stay at home parent falls ill, has an accident or even dies, what are the options available to help families? The good news is that families with unlimited savings or extraordinarily generous relatives will be fine. And of course some families are lucky enough to have the support of grandparents to help raise their children so they will also be OK providing Grandma and Grandpa have a spare 40 hours a week. But what if the illness is extensive or the parent, sadly, has passed away?
If the primary earner took time off work because their stay at home partner fell ill, or even died, this would probably leave families seriously out of pocket, particularly in circumstances where workers do not receive an income whilst taking time out to care for their partner and children.
HOW TO INSURE THE VALUE OF A STAY AT HOME PARENT
So what are the other options? What most people don’t realise is that they can insure the value of a stay at home parent should they become unable to do their normal duties due to accident, illness or even death. These policies, income protection and life insurance, are just as worthwhile considering for the stay at home parent. In the case of income protection, a policy will pay out a certain amount for a period of up to three months whilst mum or dad is unable to cook, clean and care. Life insurance is even simpler, providing a lump sum pay-out in the event of death.
Whilst no one likes to think about facing the trauma and upset of a major illness or death in their family, having a life insurance policy or income protection policy in place can provide real peace of mind and ensure that the whole family is looked after should something unforeseen happen to the stay at home parent.
At Tailored Lifetime Solutions, our Financial Planners specialise in helping people find the right kind of insurance to protect themselves and their family. Call us on 03 9851 0300 to arrange a meeting.