Many people believe that life insurance is only important for the primary financial provider of a family. According to Kate Reid, stay-at-home parents should consider purchasing life insurance as well.
While the benefits of the primary breadwinner having insurance are obvious – providing financial support for the family when that income no longer exists. It is important to keep in mind that financial support may also be needed should the valuable services of a full-time, stay-at-home parent no longer be available.
How Life Insurance Provides Financial Protection
When the primary earner in a family passes away, the remaining family members often face serious financial problems. One way to protect a family from these difficulties is to purchase life insurance.
The policy holder makes monthly premium payments toward the policy and, should he or she pass away, the beneficiaries of the life insurance policy will receive either a lump sum or monthly payments from the insurance company to help supplement for the missing income and help to continue cover expenses.
For many families, having this life insurance policy can bring tremendous peace of mind of knowing their loved ones continue to be care for should they pass away. This feeling is especially true for those members of the family who provide the majority of the family’s overall income.
Life insurance has become increasing more affordable over the past 10 years – it is possible for an applicant who is 30 years of age and a non-smoker to secure a 20 year, £200,000 policy for as little as £10 a month.
Why Stay-At-Home Mums and Dads Need Life Insurance
While primary earners provide financial stability for a family, stay-at-home parents offer a number of other valuable services to the family. Families who have one parent stay home to care for children save the family thousands in childcare services – should this family member pass away, it may be necessary to hire a babysitter or nanny to continue the children’s care.
When a stay-at-home parent has a life insurance policy, death benefits can help to pay those unforeseen expenses.
Joint Life Insurance Policies
Should a family choose to have life insurance coverage for both the primary breadwinner and the stay-at-home parent, having a joint policy can often help to save them money. Instead of two, separate policies that will both pay out, the family would have one joint policy that would pay out when the first of the co-policy owners passes away.
When thinking about how much coverage may be needed for a joint policy, keep in mind all the possible expenses including supplementing an income as well as adding up the sometimes expensive costs of childcare over the number of years it will be needed.
Life Insurance Policies Can Be Amended
In some cases, when a family takes out a life insurance policy, they circumstances may change some years down the road. Usually, a policy holder can cancel his or her current policy if it no longer meets his or her needs or he or she can take out additional coverage depending on the changes in the situation.
Also, research whether or not the primary earner’s employer pays what is known as “death-in-service” benefits – if they do, it is possible for you to not need as much coverage as originally thought.