Many people think that the most important need for life insurance is to replace the income of a wage-earner in the family should that person pass away, and their income stop. While that is an excellent reason to make sure you have proper life insurance in place to protect your family from financial hardship, a paycheque is not the only part of a household that can benefit from the protection of a life insurance policy.
What are you not paying for?
If your family runs on a combination of external income and internal labour, then you may want to consider making sure that the “cost” of the internal labour is protected with life insurance. What do we mean by “internal labour?” This refers to jobs that are done for the household or for any minor children that may not be compensated with by a salary.
If the person who performs these duties, like childcare, grocery shopping, meal preparation, house cleaning, driving children to and from activities, etc., were to pass away, these duties wouldn’t simply stop. They will still need to be done only now they might need to be done by people external to the family and may come at a significant cost. Perhaps a nanny would need to be hired. Maybe a transportation service would need to be contracted to take children to and from school and activities. A weekly cleaning service might be hired. All of this costs money. A life insurance policy for a stay-at-home parent could help cover these expenses.
More than just life insurance
Stay-at-home parents can also benefit from critical illness protection. Critical Illness insurance provides a lump-sum Critical Illness Benefit that is currently not taxable when you are diagnosed with a covered condition, as defined in your contract, and you survive the 30-day survival period. The money you receive can be used however you choose without restriction.1
Whether you are the primary wage earner in your family, or you contribute to the household in other ways, having the proper insurance protection in place can provide valuable financial peace-of-mind when you need it most. Reach out to your insurance advisor to learn more!
- Under the Income Tax Act (Canada) and at the date of publication, the receipt of Critical Illness Benefits is not currently taxable. Applicable legislation and regulatory expectations may change. ivari does not guarantee nor is it responsible for the tax treatment applicable to its product feature(s). Please consult your legal or tax advisor for an opinion on this matter in relation to your particular circumstances.
Disclaimer
This article is intended for general information purposes only and should not be considered specific or personal investment, insurance, estate planning, legal or tax advice or a solicitation to purchase insurance. Nor should any medical information provided in this article be considered medical or health advice and should not be considered a substitute for advice from a qualified medical professional. While reasonable efforts have been made to ensure that the contents of this article have been derived from sources believed to be reliable and accurate at the time of publication, ivari does not warrant the accuracy or completeness of the information contained herein.
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