“Non-working” parents

We apologise to tens of thousands of mums and dads all over the country for this headline. “Non-working” in this context means not economically active; anyone who thinks looking after children (or older generations, for that matter) is not work, has never done it!

An unpaid chauffeur …

The reason for highlighting this issue is that it can be all too easy to focus insurance on what might happen if the principal breadwinner is lost to the family; yet the loss of a carer can be just as financially devastating.
If you consider what many carers actually do, it can consist of: part-time paid work, cooking, cleaning, washing, looking after sick children, as well as preparing those who are ‘fit’ for school, games, leisure activities and then getting them there!

In most modern families, many of these are actually shared responsibilities – but in practice primary caring usually falls to one person and that is frequently the lower earner (almost irrespective of the hours worked).

Does this matter?
The issue is, of course, that if the carer were no longer available to undertake these tasks, not to mention possibly contributing towards the family budget as well, then they would have to be undertaken by someone else. In the short-term, at least, this will fall to the remaining parent. But from then on, his or her own earning potential becomes even more important to the family exchequer and time spent on looking after the family, while important in terms of rebuilding the family unit, simply detracts from the ability to earn sufficient for the family to carry on.

There is an alternative
The importance of securing an alternative source of income to cover not just the immediate aftermath of losing a parent, but also for the longer term cannot be over-emphasised. In all probability the first month or so is likely to be a period of complete personal devastation – and financial crisis – as the immediate needs of children and the surviving parent are addressed.

Having access to a lump sum sufficient to remove all financial concerns is one way of allowing the family to address other, more important issues, such as starting the grieving process. Ideally, this should be adequate to cover the entire amount of any outstanding borrowing, including mortgages, credit cards and other secured and unsecured loans. If there is a significant sum left over to provide for living expenses for a few months, all the better.

The loss of a carer can leave a massive gap

The longer term
It is important, however, also to consider the longer term. As the immediate impact of what has happened recedes, the support provided by the extended family and friends can naturally ebb, leaving the immediate family to ‘pick up the pieces’ of their lives. During this period and beyond, having a source of income that allows the surviving parent to focus more on the family, than might previously have been the case, is one of the factors that could speed the recovery process.

Insurance is available that can provide both a lump sum and an income for as long as may be deemed necessary in order that the family can regroup and move forward.

The cost need not be expensive, because insurance companies know that most people tend to live longer than earlier generations, so the number of claims will be less than may once have been the case.

What about sickness?
It is also usually possible to arrange insurance to provide an income should the caring parent become incapacitated through injury or illness for a sustained period, although the level of cover available may be limited.

You should take individual professional advice before making any decision relating to your personal finances.

NOTHING CONTAINED IN THE ARTICLE SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE. PLEASE NOTE THAT THERE MAY BE VARIATIONS FOR THOSE LIVING IN SCOTLAND AND NORTHERN IRELAND. 

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