Will life insurance cover single or stay-at-home parents?

Matthew Lang

Matthew Lang

Updated 15/04/2021

Life insurers will calculate the value of looking after children when single or stay-at-home parents take out life cover. Find out more.

Will life insurance cover single or stay-at-home parents?

A guide to life insurance for stay at home mums

Are there any life insurance options for single or stay-at-home parents?

How do we value the most important yet underestimated as well as unpaid job in the world?

You may be surprised to find out how the insurance industry values parents.

You might also be surprised to know that a lot of single or stay-at-home parents take out life cover.

In this guide, we'll detail why parents might want to consider life insurance, what the benefits are and how to find the right level of cover.

Key Points

  • Life insurance can benefit anyone who provides for and supports others, even if the work is unpaid.

  • Life insurance for single and stay-at-home parents can help cover their family financially should the worst happen.

  • Insurers calculate the value of a policy according to what it would cost to get someone else to conduct your day-to-day family tasks.

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How do I know if I need life insurance?

A good way of understanding whether you need life insurance is by considering what would happen if illness or injury meant you were unable to provide for yourself and your family.

This isn't simply a question of how much money you earn for your household, but also how much work you do - paid or unpaid.

If you were unable to meet the daily needs of your family, what would your partner, children or other dependents do?

What are the benefits of life insurance for single parents and stay-at-home parents?

Life insurance offers financial protection for your family should anything happen to you.

Whether you're a mum or dad, single or partnered up, working or slogging it out at home, everybody needs that peace of mind.

If you weren't able to do groceries and cook dinner, or drive the kids to soccer or play dates, it's likely your family would likely need help.

Potentially even in the form of a nanny or spending more on ready meals.

This is where life insurance can kick in and offer protection for stay-at-home parents by paying out a lump sum that can help with the day-to-day costs of raising a family.

When it comes to single parents, finances are often tight.

A good life insurance policy can make sure bills are taken care of and your children are financially secure.

This can either help if you're too ill or injured to work, or recovering from a major health scare like cancer or a heart attack.

Or, in a worst-case scenario, it removes some of the financial pressure on whoever will be taking care of your children.

What is unpaid work and why is it relevant to life insurance?

Unpaid work includes any and all tasks involved with caring for others, including childcare, cooking, cleaning and all other forms of home maintenance.

Basically, if someone else could be paid to perform the same activity, it's considered unpaid work.

In 2017, PWC estimated that unpaid work in Australia accounted for $565.5 billion (yes, billion!) each year.

That's around 33% of this country's GDP.

In fact, researchers estimate that unpaid childcare is one of the largest and most valuable industries in Australia at $409.5 billion.

So when you're doing the school run or entertaining your toddler on a rainy day, this work has a quantifiable economic value.

It's why insurance providers recognise this contribution and value the cover for stay-at-home or single parents accordingly.

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What life insurance is available for single and stay-at-home parents?

Life insurance for single and stay-at-home parents takes into account a combination of paid and unpaid work.

It covers families for an equivalent amount in the case of serious illness, injury or death.

Parents can also consider other specific types of policies which fall under the umbrella of life insurance, including total and permanent disability and trauma insurance.

Is life insurance worth it if my family is struggling financially?

If you're a single or stay-at-home parent, chances are your budget is tight.

Making room in your weekly spend for life insurance can support your family in the long run by offering a financial safety net if anything were to happen to you.

How much life insurance do I need?

There's no one-size-fits-all life insurance solution.

The type and level of cover you will need really depends on your family situation.

There's a few things to consider when you're working out how much you need:

  • The number of children you have

  • Whether you're a single or two-parent family

  • Whether you have a mortgage or other loans

  • How much you're willing to spend on your monthly premium.

How can I buy life insurance if I'm a single or stay-at-home parent?

We know! It can be tempting to put life insurance in the "too hard basket" or simply leave it at the bottom of your very long to-do list.

Taking care of kids often leaves feels like there are never enough hours in the day to complete even the most pressing tasks.

It's why Compare Club is an easy, hassle free solution.

You can compare cover and apply for a policy in the time it takes your kids to build a zombie fort out of your couch cushions.

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The information contained in this guide is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. As such, it is important that you consider the appropriateness of any advice and the relevant product disclosure statement (PDS) before proceeding. Check with a financial professional before making any decisions.

PriceWaterhouseCoopers, Understanding The Unpaid Economy, March 2017. Workplace Gender Equality Agency, Unpaid Care Work and the Labour Market, Nov 2016 NobleOak, Stay At Home Partners Life Insurance, Dec 2020

Matthew Lang is the general manager of life insurance at Compare Club. Matthew leads a team of dedicated professionals who are passionate about helping individuals and families make informed decisions about their life insurance needs. Whether it's finding the right coverage for your specific circumstances, comparing policies, or optimizing your existing policy, Matthew and his team are here to provide expert guidance and support.

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Matthew Lang

General Manager of Life Insurance