There’s a lot to think about as your family grows. Will our house be a safe and nurturing environment for the kids? Which parent will stop working? How will your kids be educated and disciplined? The questions seem to be never-ending! Today we deconstruct one niche, but common, issue for Australian families – how should my income protection insurance policy change as my family grows?
Should the Non-Working Spouse Be Insured?
Many companies now offer income protection policies that pay a benefit if a non-working spouse is unable to fulfil their household duties. This recognises that although there is no monetary income on which to base benefits, this partner makes a contribution to the house which could only be replaced with money if they were injured. Homemaker income protection can help pay for cleaning, washing and cooking services, and more.
However, remember that this type of income protection may not be tax deductible, as a standard policy would be.
Should You Choose a Shorter Waiting Period?
Having a family usually means more bills that are more urgent. You don’t have the same flexibility in your expenses that you do as a childless family, and so you may want to think about choosing a shorter waiting period so that benefits can be paid sooner after you become disabled.
Is Your Cover Guaranteed?
If you’re in relatively good health and with a growing family, now is the time to check that your income protection cover is guaranteed. Your policy document should have a statement saying something like “We guarantee to provide cover for as long as you continue to pay your premiums as and when due, regardless of changes in your health or circumstance”.
Are Pregnancy Complications Covered?
Growing your family is usually a long term project! Even if this pregnancy is uncomplicated, you should check whether your income protection plan pays out for complications of pregnancy that would prevent you from working. This may be useful if you plan for your new bundle to have siblings in the future.
Are You Getting the Best Deal?
There are plenty of informative and neutral price comparison sites for income protection insurance, which take the legwork out of ensuring you
have the best income protection deal.
Utilise these comparison sites, and you may have a little extra cash to spend on nappies and toys!