Protecting the Non-Working Spouse

In the event of death or disablement of the home maker, the working spouse is usually faced with a limited number of choices. They can either take a leave of absence or resign from work to look after the household or employ someone to do this for them.

In this situation, both resigning from work or employing a house-keeper will have an enormous financial impact on household income. In addition to this, if the home maker becomes critically ill or disabled, the cost of ongoing medical care can leave the family financially drained.

Life insurance, Total and Permanent Disability (TPD) and Critical Illness policies are capable of providing lump sum benefits in the event of an unfortunate accident. They can be used to fund essential medical expenses, rehabilitation and lifestyle expenses resulting from the injury, as well as paying for child care and house keepers or future legacy payments such as weddings, birthdays etc.

Whilst TPD cover for a person with a home-maker occupation definition can be expensive, there are a number of strategies that can be adapted to minimise costs.  Consider taking out the Life and TPD policies through superannuation and funding it by way of super-splitting. The alternative is for the primary income earner to pay to cover the home-carer through his/her superannuation which can attract a tax-offset for the working (contributing) spouse. If both parents are currently still working but it is expected that one will take leave or resign to stay at home, it would be beneficial to take up TPD cover under their current occupation. This will allow for both a higher benefit amount and reduced premiums.

Alexanders can assist with this type of financial planning, and with minimal fuss, you can underpin your current lifestyle against unforeseen circumstances. For more information please contact our financial planner Jason Abrahams on (02) 9436 0099.