Protecng homemakers against temporary incapacityMost planners would agree that temporarily losing the capacity to generate income is, more oen than not, likely to result in direfinancial consequences for the family unit. As a result, the convenonal financial planning approach is almost always to ensureincome is covered in the event of temporary incapacity.However, while the main breadwinner generally takes priority, temporary incapacity of a non‐income earning spouse such as ahomemaker can also have a significant financial impact on the family unit. In contrast there is very lile coverage for temporaryincapacity in this segment.To quanfy the impact of a homemaker being temporarily incapacitated, a recent survey esmated the cost of replacing a mother tobe in excess of $75,000 per annum. And if you think about it, who would pick up these pieces...Cooking and preparing mealsCleaning the houseWashing and drying clothesShopping for groceriesCaring for children (feeding, supervising, bathing, dressing, transporng)The following table from the Australian Bureau of Stascs esmates that a female homemaker who is not employed and haschildren under 15, spends around 65 hours per week on unpaid household work. Even with the connuaon of the breadwinner’sincome, there simply wouldn’t be enough hours in the day to make up for the homemaker’s lost me.Female partnernot employedFemale partneremployed parttimeMales(hours and minutes per week)Paid Household Totalwork workFemales(hours and minutes per week)Paid Household Totalwork work52:3 19:57 72:27 0:29 65:13 65:4151:27 51:27 21:21 19:29 50:24 69:53Source: ABS 2006 – Couples with children aged under 15 years where the male partner is employed full meIt is esmated that there is a 1 in 3 chance of a person becoming disabled for more than 3 months before the age of 65 and thedisability resulng in them having no income during this period. Homemakers are likely to experience a similar rate of temporaryincapacity.A significant barrier to obtaining cover for homemakers has always been product limitaon. Homemakers have had access to totaland permanent disablement coverage for some me now, but temporary disability coverage has not been so readily available.Product providers however are now starng to provide soluons. BT for example has this year introduced Income Protecon forHomemakers as part of their Protecon Plans offering. Homemakers who are not working can insure themselves against temporaryincapacity and can receive a monthly benefit of up to $5,000 for up to 2 years, on being unable to perform normal household dues.Given the obvious need in this area, especially with household budgets as ght as they are, other providers are likely to follow suit.A significant barrier to obtaining cover for homemakers has always been product limitaon. Homemakers have had access to totaland permanent disablement coverage for some me now, but temporary disability coverage has not been so readily available.
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