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Life insurance for mums, dads and stay-at-home parents

Life insurance isn’t just for family breadwinners. The contribution of stay-at-home parents need to be considered, too.

Life insurance isn’t just for family breadwinners. The contribution of stay-at-home parents need to be considered, too.

Written by
Anna McEntee
Insurance comparison expert
Last Updated
7 min read
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Do stay-at-home parents need life insurance?

Yes, life insurance for mums and dads who are stay-at-home parents is well worth considering. The true ‘value’ of stay-at-home parents is often overlooked when families try to work out their insurance needs. Just because stay-at-home parents aren’t earning, that doesn’t mean they aren’t valuable to the household or need life insurance cover.

Stay-at-home parents do a lot of unpaid work. It’s essentially a full-time job. Whether it’s the time spent engaging and caring for a child or children, to doing household chores like cooking and cleaning.

That’s why it’s important to think about who would do all these jobs if you were too sick to manage them all. Or if the unthinkable happened and your partner died, you’d be the main breadwinner.

It’s perhaps worth considering how you might fit these tasks in, as well as going to work. Also, remember that paying someone else to do them out of your current earnings could be very costly.

What life insurance for single mums and dads can cover

Taking out life insurance to cover the non-working mum or dad would mean that your loved ones would get a life insurance payment on their death. This is usually paid as a lump sum.

This acts as a financial safety net that could help you clear outstanding debts such as your mortgage and help to pay bills. It could also free up the surviving wage earner to work less, not work for a while, or pay for childcare.

It’s important to get the right level of life insurance. You will want to work out how much money you would need to help your family if you were to face a different kind of future.

See our life insurance calculator

Looking after children

Bereaved children are potentially very vulnerable. If you work full-time, you might have to arrange full-time childcare for any young children or decide to give up work to care for them yourself.

Funeral costs

In the immediate aftermath of the death of a parent, there will also be funeral costs to pay. According to the Competition and Markets Authority, these have risen by 6% each year since 2005. See more on funeral costs.

Types of life insurance for mums, dads, and stay-at-home parents

As a mum or a dad, life insurance can provide great financial protection for your children. However, there are several types of life insurance options to consider:

  • Level term life insurance – this policy is set for an agreed period (e.g. 30 years) and pays out a fixed fee to your beneficiaries. The amount of cover depends on the premium you’re willing to pay each month.
  • Decreasing term life insurance – a decreasing term life policy also runs for a specific period, but the payout isn’t fixed. As the policy goes on, the payout decreases over time. So, if you died after five years, the payout would be more than if you died after 20. This type of life insurance is often used to cover a repayment mortgage, with the potential payout decreasing in line with an outstanding mortgage balance. This could be the best life insurance for young mums and dads, as it’s usually the most affordable life insurance and it provides the most protection when the child is most vulnerable.
  • Whole of life insurance – this type of cover tends to be the most expensive, because it offers a guaranteed payout. As long as you keep up with the monthly payments, you’re covered for the rest of your life for a fixed payout.
  • Joint life insurance – if you’re part of a couple, a joint life insurance policy will cover both of you, but only pays out once. This is designed to provide financial security to the surviving parent/partner, whoever that is. This is cheaper than covering you both separately, but you only get the one payout.
  • Death in service only applies to a working parent, as it’s an employee benefit offered by some workplaces. It acts very similarly to a life insurance policy, and you may already have this cover in place if your employer provides it. However, death in service cover only applies while you’re working for that company. If you change jobs or give up work to become a stay-at-home parent, you’ll no longer be covered.

What else to consider with life insurance for mums and dads

Life insurance for single mums and dads

If you’re a single parent, your child may depend on you entirely for financial support. This makes the protection offered by life insurance well worth considering. The right life insurance policy could offer you peace of mind, knowing your child will be looked after financially, in the event of your death.

You may want to consider writing a life insurance policy in trust. This will separate the policy payout from the rest of your estate (which is subject to inheritance tax) and prevents it from being used to pay off any outstanding debts you may hold. It could also pay out sooner, because the policy won’t need to wait for probate. Probate is the legal process of calculating your estate and its distribution after your death. This can take some time.

Applying for life insurance when pregnant

If you’re applying for life insurance when pregnant, you won’t need to worry about it affecting your premiums. Pregnancy isn’t considered the same as other medical conditions that may affect your policy. These include chronic conditions like diabetes.

During your application, you’ll be asked certain health-related questions, with your weight, alcohol consumption and smoking all factors in calculating your premiums.

Naturally, you’ll put on weight during your pregnancy, so you should state the weight you were before getting pregnant.

For alcohol consumption, you may be asked about both your current drinking habits (likely zero) and your history of alcohol consumption. Just answer honestly.

Finally, for smoking, life insurance providers will only classify you as a non-smoker if you haven’t smoked in the last 12 months. If you’ve only given up for the pregnancy, that won’t be enough. E-cigarettes and other nicotine products (like patches) will also count.

Bereavement Support Payment

You may be entitled to a Bereavement Support Payment if you’re married or in a civil partnership. Widows, widowers, or surviving civil partners must claim within three months of their partner’s death to get the full amount.

To be eligible, you or your partner will need to have paid at least 25 weeks of National Insurance contributions. Or, your partner died because of an accident at work or a disease caused by work. You’ll also need to be under the State Pension age and living in the UK.
If you’re entitled to the payment, you could receive a higher rate if you get Child Benefit or if you were pregnant when your husband, wife or civil partner died.

Rate First payment Monthly payment
Higher rate £3,500 £350
Lower rate £2,500 £100

If you receive benefits, the Bereavement Support payment won’t affect them for a year after the first payment.

Alternatives to life insurance for stay-at-home parents

If you decide that a life insurance policy isn’t right for you, there are some alternatives to think about for stay-at-home mums and dads:

Critical illness cover

Critical illness cover is a type of income protection that you can add to a life insurance policy. It’s designed to pay out if you’re diagnosed with a severe illness or injury. The payout could cover potential lost earnings or make necessary adjustments to your home.

Mortgage insurance

If you’re worried about your child or partner losing their home if you died, mortgage insurance is designed to clear any outstanding mortgage debt.

Child health insurance

If your primary concern is protecting your child, you might want to consider a child health insurance policy. This would allow them to access private health treatment if they were injured or fell ill. With private healthcare, they could potentially skip long waiting lists or access treatments that are unavailable through the NHS.

Compare life insurance for mums, dads and stay-at-home parents

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