Women spend on average 33.75 hours per week on housework, shopping and looking after children. If a nominal value of $30 per hour was placed on this unpaid work around the home, a housekeeper employed to do the same amount of work would cost around $1,020 for a seven day week or $53,040 per annum.

Yet only 50 per cent of female parents hold life insurance policies, more often than not through super. And only one in five full-time working mums has enough insurance to cover their income for three years or more, well short of recommended guidelines.

While death is something nobody likes to think about, the sad fact is around 4400 Australian parents with dependent kids die each year and many more become sidelined as a result of illness or injury.

Unless you’re independently wealthy, the only way to safeguard your family’s financial wellbeing under these circumstances is by adequately insuring both parents.

Life’s facts

It typically costs $537,000 to raise two children from birth to age 21 years. One in four women will be diagnosed with cancer before the age of 75. In Australia, women over 40 years of age have a one in three chance of developing coronary heart disease.

Life is full of surprises – good and bad. Insurance provides you with the ability to transfer the financial impact of some of the more drastic surprises that can happen. Insurance will never compensate for the loss of a loved one, or replace their role in the family, but it can help reduce the financial burden by providing the capital to ensure you and your family have choices.

It won’t happen to me

Jenny, 37, and George, 41, had two young children and what seemed to be the perfect life. George earned $100,000 a year and travelled inter-state frequently on business. Jenny was a stay-at-home mum and planned to return to work when both kids reached school age.

The couple saw a financial adviser to find out how best to protect the family should anything happen to Jenny.

Their adviser recommended that they insure Jenny’s life for the value of the mortgage plus a lump sum to provide an income stream for childcare and school fees. They followed his advice, taking both Term Life insurance and some Trauma cover.

A year later, Jenny was diagnosed with cancer. When Jenny’s condition worsened, the couple used her Trauma benefits to pay off the mortgage and George decided to take a less demanding job to spend more time with Jenny and the children.

Eight months later, Jenny died. George took three months unpaid leave to look after their children. He hired a nanny and part-time housekeeper, and has set up trust accounts for the children – all made possible by Jenny’s Term Life insurance policy.

• Do you have a mortgage?
• Do you have any personal loans?
• Do you have any credit card debt?
• Do you have dependants?
• Would your financial position be affected if you were to suffer from an illness or injury (remember you would need to have enough capital to fund medical expenses and the ability to take time off work to recover)?
• Do you want to have enough capital to look after your dependants if you were unable to care for them for an extended period of time or perhaps indefinitely?

If you answered yes to any of the above questions, then you should seriously consider speaking to IAS about a personal risk management plan.

This entry was posted on Thursday, May 27th, 2010 at 2:46 pm and is filed under Insurance, Personal Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.