Spring 2009
The True Cost of Stay-at Home Parents
Just because a stay-at home-parent doesn’t earn a salary, it doesn’t mean it wouldn’t hurt their family if they were to pass away.
Here are some statistics to help you when discussing the subject on insuring non working spouses. The site www.msn.com puts the value of a home-maker at $50,000 per annum!
Key costs to cover in the event of a death include:
Child Care
Day care centres for young children are not cheap and a full time nanny is even more expensive. Typically they run at $ 200 per week, amounting to $ 10,400 a year. Even if children are at school, arrangements may have to be made for after-school care.
Chef Duties
Due to work commitments, adding cooking to your daily routine can be quite impractical. Cooks can be hired at around $ 100 per week to cook your meals in advance. This can cost up to $ 5,200 a year.
Maid Service
Cleaners cost about $25 per hour and are typically engaged for 3 hours per week. That’s just under $ 4,000 a year.
Counsellor
Counselling services for family members should also be taken into account. Not is the homemaker the one that cooks, cleans and baby-sits. They are also the heart of the home. Losing them can be emotionally devastating and counselling is often required. At upwards of $250 per hour, this can end up costing thousands!
You can also take into account the disruption to the surviving spouse/partner’s work and possible los of income. They’re unlikely to go straight back to work after the funeral, so taking a couple of months off is not uncommon. For an income of $ 50,000 that could mean almost $.9.000 in lost earnings.
The average cost of all these services could obviously ruin the average middle income family with no life insurance coverage for the stay at home parent. There are only 3 options for families that suffer the loss of a non-working spouse who doesn’t have cover……….
- Pay the expenses out of savings
- Add to the mortgage
- Take out a personal loan
- Sell your assets (boat, car, home)
But there’s a sensible, reliable and cost effective fifth option. Ensure your stay at home partner has Life Cover – the most reliable option of all.
Talk to your Eric James advisor today as to how you can protect your family’s quality of life in the unforeseen advent of losing a loved one. FREE PHONE 0800 ERICJAMES
Sure We’ll Be Covered – Won’t We?
Someone said the other day “I probably don’t need Income Protection – ACC will look after me.”
Well, that’s not necessarily true.
ACC covers injury only, not illness. And given the fact that illness prevents more than two thirds of people not being able to work, (with only about a third relating to injury) relying on an ACC payment, and all the restrictions that might go with it even if you do qualify), may result in inadequate compensation or possibly none at all.
In other words, there’s a far greater chance of not working as a result of an illness (which is not covered by ACC) than an injury.
That’s why many of our clients see having an Income Protection plan with us as a very wise choice. The great thing about Income Protection is that it covers both injury and illness. Plus, it not only covers common, long term sicknesses, but also depression and mental illness. And unlike ACC, you won’t face the prospect of being forced to seek alternative employment unrelated to your injury.
You can decide on your preferred level of contribution and the conditions that best suit your circumstances. Income Protection can give you cover for up to 75% of lost income. That means you will be able to:
- Pay your mortgage and protect the family home
- Pay food bills
- Pay essential services such as power, phone & rates
- Continue to provide any children with the day to day opportunities that are important.
There are of course some issues regarding existing medical conditions, And everyone’s circumstances are different we can then tailor make a policy that best suits you. So why take the risk. Call us to today to find out how Income Protection is a very wise choice!
The Right Cover at the Right Time
There’s a saying that goes “the only constant thing in life is change”. That’s why we believe that regular reviews of your existing cover is very important.
What was adequate or suitable say, 5 years ago, may not be now. People’s lives are constantly changing and the level of protection combined with the right mix of benefits, needs to be relevant to your current lifestyle.
For example, you may now have a larger family or alternatively the kids have flown the nest. Maybe there’s been a recent house purchase requiring a substantial mortgage – or your job and income has changed since taking out your original policy.
At Eric James & Associates we can, at no obligation, conduct a thorough, in-depth review of your current life-stage and recommend any changes to ensure the cover is up to date and relevant. What’s more, we can develop packages that combine a number of products that can often result in a better level of protection and premium savings.
If your lifestyle and personal circumstances have changed since taking out your policy, please call us to arrange a comprehensive review.
