It's distressing to learn how few families with young kids have life insurance. Stay-at-home parents have a special need for life insurance. Should a stay-at-home parent pass away, the remaining parent would find themselves suddenly paying for childcare and everything else a stay-at-home parent does on a day to day basis.
The minimum cost of replacing a stay-at-home parent, with one pre-schooler and one school going child, we estimate would run to at least $40,000 a year. Breaking down the price of having someone else handle our stay-at-home parent's various duties:
- Cooking, laundry and cleaning, $15,000
- Child care, $8,000
- Homework and after school help, $5,000
- Kid’s taxi alternative, $2,500
- Shopping, garden work, party and activity planning, finances, etc., $9,500
That's why it's essential the stay-at-home parent has a life policy. What you need is a policy that's easy to buy, easy to own and cheap! Buying what's called "protection insurance" is simple and costs practically no money at all. From Pinnacle Life a 36-year old female can get a $500,000 life insurance policy and only pay $25.69 per month. Men's coverage is a little more expensive due to differences in factors like life expectancy.
Remember these simple pointers when shopping around for a life insurance policy
- Researching and shopping for life insurance is easy on the internet.
- How much life insurance do you need? The simplest rule is … whatever you can afford to maintain long-term.
- Cash back offers and the like are good for the first year, but life insurance is a long term commitment, so get the policy that is going to be the best value over a long-run.
- Protection insurance which is widely sold in NZ, is what is known as annually renewable term. Each year the policy premiums will increase with your advancing age. Simply put, the older you get, the more you pay.
- Certain high risk health conditions make life insurance more expensive. If you have such a condition, be prepared to allow the insurer to have access to health records, so they can determine your price.
For a quick quote to see how much you’re likely to pay for life insurance, click below
