Why your family is at risk if you don't protect mumWhen it comes to insurance, too much focus is often placed on the highest earner, usually the male, in the household.

This mistake could be costly and leave your family struggling to make ends meet if the unexpected happens.

Why is it important to make sure both parents are covered?

Over the past 40 years more and more women have entered the workplace:

  • Two thirds of all women work
  • 72% of all mothers work
  • The number of working mothers has risen by 800,000 since 1996

(Source: Aegon & Office for National Statistics)

In these tough economic times the contribution of mothers to the household finances is often crucial in making ends meet.

Studies show that women earn less than men and are more likely to work in on a part-time basis, but that doesn’t mean their contribution to the household is any less valuable. In fact one survey has found that the average to replace the stay at home mum, would be the equivalent of £30,000 each year to the household.

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How would you cope?

So what options do you have to cope with the illness, or worse death, of either a stay at home or working mum?

State Benefits 1 in 3 women say they would have to rely on state benefits if they became seriously ill, despite the fact the minimum state benefit is around £1,200 per month lower than the average salary.

It’s also important to remember that if they become ill, stay at home parents are not entitled to sick pay in the same way workers are.

Savings 1 in 3 mothers say they would rely on their savings. But 30% of mothers admit to having no savings at all and 34% of the UK population have less than £250 put aside for emergencies.

Cut back on spending 25% of all mothers say they would have to withdraw their children from childcare and 5% of homeowners would take the drastic step of selling their home.

Ask yourself some tough questions:

  • Do I want my family living on state benefits if the mother of our children becomes ill or dies?
  • Does my family have enough in savings for us to be able cope?
  • Could my family really cut out enough expenditure to make ends meet? Do we want to have to take our children out of childcare or sell the house?

If the answers to these questions are mostly “no” then you have a problem.

The good news though is that there is a simple and surprisingly cost-effective solution.

Yes, we’re talking about insurance, but don’t click away just yet, if you answered “no” to the questions, it’s too important not to read on and understand your options a little better.

Your options

There are essentially four types of protection you could consider:

Life Cover Which pays out a lump sum should you die

Critical Illness Cover Which pays out a lump sum should you suffer a serious illness covered by the policy, for example, cancer

Life & Critical Illness Cover Which combines the benefits of the two options and pays out on either serious illness or death, whichever happens first

Income Replacement This option pays an income, not a lump sum, should you be unable to work for a pre-agreed period of time

How much does each option costs?

The cost can be surprisingly low, especially for Life and Critical Illness Cover, which pay out lump sums.

The following examples show the cost of providing cover for female, given a range of ages and sums assured.

Age 25

£100,000£200,000£300,000
Life Cover£5.20£7.60£10.10
Critical Illness Cover£14.88£21.82£38.97
Life & Critical Illness Cover£13.51£21.82£38.97

Age 35

£100,000£200,000£300,000
Life Cover£5.22£10.68£14.61
Critical Illness Cover£26.28£51.13£75.69
Life & Critical Illness Cover£26.29£51.14£76.22

Age 45

£100,000£200,000£300,000
Life Cover£12.55£21.80£30.80
Critical Illness Cover£59.81£114.70£168.96
Life & Critical Illness Cover£58.80£114.70£168.97

We have assumed that the person being insured is in good health, doesn’t smoke and that the policy will last for 15 years with premiums which are guaranteed never to change.

Mum’s the word, and she needs protecting

The role played by a mother is unique to every household, but their loss, whether through illness or death, would create an emotional and financial hole.

The options to fill the financial void are limited; most people don’t want to rely on state benefits, have enough savings to cope or could realistically claim that cutting the family expenditure is a viable option.

The only solution is often therefore insurance, which can bring immediate peace of mind, at a relatively low cost and is simple to put in place.

We’re here to help

Our Independent Financial Advisers are experts in assessing your needs and recommending a solution which not only fits your budget, but that will also provide vital protection for your family.

If you would like to talk through your options call us on 0115 933 8433 or enquire online by clicking here.