Ever heard the saying “it takes two to tango”? Well, in some cases, the same is true for life insurance as well.

According to insurance advisers, it’s a common misconception that only the breadwinners need life cover. Sure, protecting the main income earner in the family makes good financial sense: your financial future, commitments and goals depend on them. But even if stay-at-home parents don’t earn an income, they still contribute to the household in many ways – with their time and work.

The reality is that losing a parent and a spouse is not something anyone likes to think about. But as well as the emotional strain it creates, it may also have a significant financial impact.

So, here’s why life insurance for non-breadwinners is worth considering.

Household management

They may not bring home a paycheck, but stay-at-home parents provide substantial support for their families. Quantifying this support in a dollar amount isn’t easy, but if they were paid for all the jobs that they perform, their salary would probably be worth well into the 6 digits.

Let’s start with housekeeping costs. The list of household tasks that a stay-at-home parent usually has on their plate is long and varied, including cleaning, cooking, gardening, washing clothes, and keeping track of utility bills so that no payments fall through the gaps.

So, how would your family cope if they were no longer there? Would you need to hire someone to take care of some of those tasks? Would the breadwinner have to work less or take a different job while the family adjusts?

A life insurance payout can help the family maintain their lifestyle and keep up with everyday expenses, should the unthinkable happen.

Childcare

Here in New Zealand, childcare costs vary widely depending on the centre, but according to Stats NZ, costs have jumped in the past decade and childcare remains by far the biggest expense for New Zealand parents. In its latest survey in 2017, Stats NZ found that parents were paying on average between $1.8 and $6.8 an hour, depending on the childcare centre.

Childcare is another important area of life where stay-at-home parents contribute to the household – and another reason to consider life insurance. Depending on the level of cover you take out, the lump-sum payout can be used for childcare expenses as well as future goals, like tertiary education for your children.

How much cover may you need?

One size doesn’t fit all, so we recommend speaking with an insurance adviser to get a clearer picture of what you may need.

An adviser will talk you through some key questions and factors to consider, including how many children you have and whether the stay-at-home parent is planning to return to a paying job in the future. If so, you may want to take out enough life insurance to replace their expected future income.

Like to get the conversation started? Click here to find a financial adviser specialised in Personal Risk near you today.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.