Protection  

Protecting stay-at-home parents

Protection for stay-at-home parents

Providers that offer protection for stay-at-home parents are not a niche. In a survey of life and critical illness cover providers by FTAdviser, all could insure stay-at-home parents.

Five providers also offer income protection for people who are stay-at-home parents at the time of application, while nine offer income protection for policyholders who become stay-at-home parents during the policy.

Holloway Friendly is the only provider surveyed that does not offer income protection for stay-at-home parents at all. A spokesperson for the mutual says it is not an active decision made by the society, but a "hangover" from its historic position that is yet to be addressed.

ProviderLife insuranceCritical illness coverIncome protection for people who are stay-at-home parents at time of applicationIncome protection for policyholders who become stay-at-home parents during the policy
Aegon         Y             Y                                                       Y                                                                  Y
AIG Life         Y             Y                                                       Y                                                                  Y
Aviva         Y             Y                                                       N                                                                  Y
Guardian         Y             Y                                                     N/A                                                                N/A
Holloway Friendly       N/A           N/A                                                       N                                                                  N
Legal & General         Y             Y                                                       Y                                                                  Y
LV        Y             Y                                                       Y                                                                  Y
Royal London        Y             Y                                                       N                                                                  Y
Scottish Widows        Y             Y                                                     N/A                                                                N/A
The Exeter        Y           N/A                                                       N                                                                  Y
Vitality        Y             Y                                                       Y                                                                  Y
Zurich        Y             Y                                                       N                                                                  Y

“Stay-at-home parents may underestimate the financial value they add to their family, however it is important to have the [protection] conversation,” Owl Financial's Hannigan says.

“Ask a stay-at-home parent to talk through their usual day, then ask what would happen if they were not able to do it. The implications will change depending on the length of time, but the financial costs soon add up.”

Advisers have a duty of care to discuss protection with all clients, London Money's Varsani says. “The idea that we should only protect the earner is an old-fashioned notion. Client needs have changed.

“The stay-at-home client may return to work in the future. To take cover later could be more expensive with age, and if there are future changes in medical circumstances the cost of cover could be further increased or may not be available at all,” he adds.

Rose St Louis, protection director at Scottish Widows, agrees it is important advisers consider all types of family situations to make sure clients are adequately protected, including stay-at-home parents.

“The earlier that families which include a primary carer have these conversations to make sure that they are properly prepared for any unexpected occurrences in the future, the better.”

Chloe Cheung is a features writer at FTAdviser