The true cost of stay-at-home parents

- TOWER


The value of a homemaker is just under NZ$50,000 per annum, according to the MSN website - http://moneycentral.msn.com/content/CollegeandFamily/P46800.asp. Key costs that need to be covered in the event of their death include:

• Child care: Daycare centres for young children are not cheap and a full-time nanny is even more expensive. Typically they run at $200 per week, amounting to $10,400 a year. Even if children are at school, arrangements may have to be made for after-school care.
• Chef duties: Due to work commitments, adding cooking to your daily routine can be quite impractical. Cooks can be hired at around $100 per week to cook your meals in advance. This can cost up to $5,200 per year.
• Maid service: Cleaners cost about $25 per hour and are typically engaged for 3 hours per week. That’s just under $4,000 a year.
• Counsellor: Counselling services for family members should also be taken into account. Not only is the homemaker the one who cooks, cleans and babysits - they are also the heart of the home. Losing them can be emotionally devastating and counselling is often required. At upwards of $250 per hour, this can end up costing thousands.

You must also take into account the disruption to the surviving spouse/partner’s work and possible loss of income. They’re unlikely to go straight back to work after the funeral, so taking a couple of months off is not uncommon. For an income of $100,000, that could mean $15,000 to $20,000 in lost earnings.

The combined cost of all these services could obviously ruin the average middle-income family with no life insurance coverage for the stay-at-home parent.

There are three possible solutions for families that suffer the loss of a non-working parent:
1. Pay the expenses out of savings.
2. Add to the mortgage.
3. Life Cover. This can be the most reliable option of the three.

Need help with your life insurance cover? Call NZIJ on 0800 90 60 90 or 04 499 3592.