Life Insurance for the Homemaker
What is a homemaker?
Many would argue that being the-stay-at home parent is more work than being the partner that goes off in the morning and spends the day out of the house.
For the ‘working’ partner, there’s a point where they come home and can rest - even the most strenuous job allows for some time off.
The stay-at-home partner, however, isn’t entitled to such a break. Living in your job means it is there 24/7, whether that’s dealing with a child’s needs or cleaning up after dinner. There’s always something to do and you are always on call – no days off, no retirement plan.
Best of all, it’s unpaid!
The homemaker is the lynchpin of any family, key to making everything run smoothly and often so adept at doing so that it goes on disregarded and unrewarded.
And then when it comes to life insurance, that’s also unconsidered. After all, why would you need life insurance to replace the income of someone who doesn’t bring in an income?
Reasons why homemakers need life insurance
Try to answer one simple question, hard though it may be: Who is going to do all that work if you are gone?
Who would sort out the children? Take them to school or other activities? Make sure their clothes are clean and food is on the table? Who would deal with the day-to-day life of a family if the homemaker was not there to do it?
The truth is that should the homemaker pass away, the financial impact on the household is going to be terrifying.
Does the working parent have to give up their job to be there for the family? Is there need for help to be employed? A cleaner? A childminder? Maybe even a full-time nanny?
Does the working parent even know how to manage the home to the right level? How many years of training and experience are they missing? It’s unlikely that they have the same understanding and expertise.
Life insurance isn’t just there for working people to replace lost income – the loss of the homemaker can be just as financially damaging.
Single parents and life insurance
Getting life insurance as a single person can be even more important – as is writing a will to make sure that the money is going exactly where you want it to!
Your children will be left devastated by your death and doing everything you can to secure their financial future will help them properly deal with their grief and not throw them into an extra layer of chaos.
As a single parent, you may want to look at placing your life insurance in trust so that it is used as you would prefer. Through a life insurance in trust policy, you can maintain a level of control over the money even once you are gone, detailing what is to be used on your children’s care or education, as well as leaving them a general inheritance for when they are older.
Can a housewife or homemaker with no income buy a life insurance policy?
Getting life insurance is no different to buying something regularly in the supermarket! There are no credit checks or financially obligating contracts to sign. You simply pay your premium each month to keep up with your life insurance and the policy will remain in place.
Life insurance companies are keen to make sure that the amount of life insurance taken out is appropriate – this is why there are typically questions regarding your income when you look at life insurance and the amount of cover needed. As a rule of thumb, many brokers would suggest that you opt for life insurance as a parent that is ten times your annual salary – giving you a ten-year financial cushion for your family to fall back onto.
Of course, if you technically have no income then it is more difficult to make this estimate, but it can still be done. Remember, though, you can comfortably make the required premium payments without fail.
Will someone have to give up a job to replace you at home?
If your partner would choose to leave work to look after your children for a while then his or her income should be considered when estimating a value for life insurance: giving up a £40,000p.a. job, for example, would warrant a policy of £400,000.
Will someone need to be employed?
Childcare costs, cleaners’ fees and more can all be calculated, as well as a portion of your partner’s time as they will undoubtedly shorten some of their work hours to compensate even with third-party help. Add up these costs and again, prepare for a ten-year span.
Will your family need to move elsewhere?
If your children will be cared for by another, such as a grandparent or aunt, then it is worth discussing potential costs with them openly in advance and reach and understanding as to how much life insurance is both warranted and achievable.
Do you want to add some inheritance?
Do you want to leave a little extra behind to help your children get a good start in their adult life? Consider the value of this and add it on to your estimate.
Will your estate fall under inheritance tax?
Adding a portion of life insurance to cover any expected inheritance tax bill can make sure your family remain in their home and don’t have to sell up and move.
This is less likely if you are looking at getting insurance with no income, but it could be the case if you are living in a home and the mortgage is already fully paid off.
Discussing life insurance for a stay-at-home mum or dad
One of the benefits of bringing up the conversation regarding life insurance for mums and dads who primarily look after the children is to take a good look at the value provided by the homemaker.
So easily, the role of homemaker is mistakenly seen as a life of luxury – researching the best insurance for a housewife is going to immediately show just how hard you work!
Do I need life insurance?
But does your family?
Life insurance is not for you – it is to provide for those you leave behind. Think of them and their financial security when making the decision about life insurance.
Remember, life insurance in the UK is only one of many products that may help you as a homemaker – there is additional cover to help if you have to take time off work sick, and if you become injured or ill in a life-changing way, critical illness cover can provide a similar level of cover to full life insurance giving you the chance of a better life and specialist medical treatment.
Read our library of articles on the subject here at Compare UK Quotes for more information and head over to life insurance broker Quick Quote Life Ltd for a no-obligation, cheap life cover quote today!