How your insurance needs change when you become a mum

12 October 2021

When I talk to parents, one situation comes up again and again: ‘We’ve just purchased a home, we have kids, and we want to make sure that we’re covered if something happens to Dad.’

For many of these families, responsibilities are being split - with Dad often working full-time and Mum managing child-care and home-care responsibilities either full-time or while also juggling a part-time job.

The problem in these situations is that because Mum isn’t the primary income provider, her insurance needs are all too often overlooked.

For those working part-time, Mum’s salary is usually disposable income that families see as a ‘nice to have’ and not something that they really consider having to live without if they were to lose it.

When I talk with these parents we discuss their debt levels, their income, their hopes and dreams. We speak about what would happen if Dad couldn’t work, or worse, becomes seriously ill or passes away.

Thinking through these worst-case scenarios when it comes to loved ones is always difficult but parents generally want all bases covered, to ensure families will be supported financially if anything were to happen to Dad.

But what about Mum?

When I sit down to discuss a family’s insurance needs, there are some really important questions I like to ask dads:

  1. What would happen if something happened to Mum?
  2. How would you work and raise the kids?
  3. Would you need a nanny or a cleaner?
  4. Would you stop working and raise the kids as she was?
  5. How much income would you need to be able to do this?

The most common response: ‘Gosh I hadn't thought about that’.

As a mum, your insurance is equally as important as your partner’s. Your job usually includes being in three places at once, cooking dinner, helping with homework and running the house whilst your partner is at work.

If anything happens to you, such as becoming seriously ill, managing all of these responsibilities, while also potentially caring for you, is a huge emotional and financial pressure for your partner to manage.

In these circumstances, Dad may need to take time off work to look after children while supporting Mum through treatments, but what happens when his leave allowance from work runs out?

Having the right amount of critical illness insurance can be the difference between a partner having sufficient time to support their family or dealing with extreme financial stress during their family's time of need.

If you or your loved ones are facing health challenges, the last thing you need is financial pressure.

You need the ability to step back, recover and get the best possible help you can: you have little people relying on you.

It is vitally important that as your circumstances change your insurance is reviewed, altered, and increased if need be. No-one wants to imagine the worst happening to them or their loved ones, but a half hour conversation with your Risk Adviser could make all the difference for your family.

A few things that may help when discussing insurance with your risk adviser:

  1. Find someone you trust: You will be disclosing all your personal details, medical history and financials to these people so if you are not comfortable with your adviser you may need to reconsider.
  2. Be prepared for what you’ll spend (particularly if you smoke): As a very general rule, white collar workers (non smokers) should look to spend between 3 and 5% of their household income on insurance. This figure is obviously very broad and varies depending on occupation, health status and also smoking status.
  3. The first conversation costs nothing: Before providing any advice on insurance needs, a statement of advice must be prepared and any upfront costs will be spoken about – it costs nothing to have the first chat with us. So, there’s nothing to lose in having this first conversation, and it may just save you financially should you suffer a claimable event. We structure our advice based on you, and there is no one shoe fits all policy.

So if you are new parents, have recently purchased a house or have had other changes to your circumstances, or have never had your insurance looked at, make sure you have your insurance needs checked - both of you.

This article was originally published on 7 October 2021 for Stay-at-Home Mum.

DISCLAIMER

While all reasonable care is taken in the preparation of this article, to the extent allowed by legislation Findex Group Ltd accept no liability whatsoever for reliance on it. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Findex Group Ltd assumes no obligation to update this content after it has been issued. The information contained is of a general nature only and you should consider whether the information is suitable for you and your personal circumstances. You should seek professional advice and speak to a qualified adviser before acting on any material.

© Findex Group Ltd 2021. All rights reserved.

12 October 2021