Cover for Non-Working Spouse

Given the important financial contribution made by your spouse as homemaker, it is appropriate that we consider the issue of insurance cover for him/her. An often overlooked area is this type of cover, even though the loss can be quite devastating for a family unit.

An income earner can be forced by events to stop work, or to reduce the hours of work to look after dependent children if there is no insurance cover in place to cover the cost of their care. The way that this cover is calculated will give you an idea of exactly what it can provide for your situation:

  • Debt Clearance – the amount insured is based on either fully or partially eliminating family debts. You would then use a portion of your normal income to pay for a housekeeper or the home help required to undertake the duties that your spouse/partner had performed. This requires an assessment of the debt level, age and number of children; or
  • Income Stream Creation – here the cover is designed to provide a lump sum to create an income stream with no residual value, and so funds the cost of home help for a fixed period.

Trauma cover can also be a worthwhile addition to term cover over your spouse. Trauma insurance will provide a lump sum payment on the diagnosis of a defined critical illness, and so would help the family overall by alleviating at least the financial stress within the domestic situation.

An important factor in this situation is that there is no extended waiting period for a lump sum payment, as it is usually payable within 14 days. The immediacy of the payment will be helpful if there is an urgent need for assistance with the cost of medical expenses or home help.