Why it’s important to insure stay-at-home spouses
Life Insurance for stay-at-home spouses is often overlooked, and this can be a costly mistake for families.
When a family assesses their need for life assurance, there are several factors to consider (such as mortgages, outstanding loans, and remaining education costs). Because the breadwinner’s income covers these costs, it’s not surprising that most consideration is given to how to establish a policy to specifically protect against that loss of salary.
Should a stay-at-home spouse or partner pass away, however, the financial risk to the family of that person dying unexpectedly can be material, especially for families with young children.
The daily duties that would likely need to be outsourced if the stay-at-home spouse passed away could include transport services (to and from school and after-school sports and activities), meals (school lunches, snacks, dinners), homework tutoring, housekeeping, and laundry, to mention a few.
On top of this, the surviving breadwinner may decide it is necessary to stop working for a few years until the children are older or they may need to hire a high-level childcare professional to help in the raising of the children. Then there are the costs of counselling, settling medical bills or other debts, as well as funeral costs to factor in.
Oxfam recently released a 2020 report, entitled ‘Time to care – Unpaid and underpaid care work and the global inequality crisis’, conservatively estimating the monetary value of women’s unpaid care work globally to be at least $10.8 trillion annually – three times the size of the world’s tech industry.
Of course, this ‘shadow labour’, as a New York Times article calls it, needs to be seen in various social and political contexts. Figures for first world countries versus developing countries will be vastly different, particularly where gender disparities are at their highest. The same New York Times article reported that while Indian women spend up to six hours a day managing the home (versus Indian men spending a mere 52 minutes a day), these figures are vastly different in countries such as Sweden, Denmark and Norway (sometimes as little as two hours), where the state provides vast assistance with child care and care for the elderly.
Whether you’ve already made arrangements for your family’s financial security by insuring the life of the breadwinner in your household, or you’re making plans to do so; it’s worth thinking about the significant financial value a stay at home spouse contributes to a household, given the number of important functions they perform, and which would be expensive to replace. That value is just as important to insure for the financial stability of the family as that of the breadwinner’s income.
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