We recently came across a newspaper article that broke our hearts as financial advisers. The article is written by a lady with three special needs children, whose husband passed away unexpectedly in 2015. She has been incredibly resilient since that happened, but, gee, her life has been tough.
In the article, the author describes how she initially tried to continue working but could not do so as her children’s care needs, understandably exacerbated by their Dad’s death, were impossible to manage as a single parent working full time. We are sure things were all the more difficult because she had just lost her life partner, as well.
Mum leaving work threw the family back onto Centrelink as their primary source of income. This is not a place that any family wants to be. In their case, Mum’s parenting payment ended on the day the youngest turned 8. Birthdays should be happy days, but this one meant that Mum had to move onto unemployment benefits. Unemployment benefits entail all sorts of hoop jumping and can easily be cut off, sometimes due to errors by Centrelink itself. Ultimately, this poor lady ended up receiving an erroneous Robodebt demand, to add to her stresses.
Mum is now trying to re-enter the workforce, but with three special needs kids who must be prioritized, that is not easy. The main thrust of her article is to detail how difficult it has been to find work given her situation.
This is a really sad situation and kudos to this Mum for writing so honestly and eloquently about it. One of the best responses the rest of us can have to an article like hers is to resolve never to let something similar happen to us.
The situation described above underscores the importance of life insurance for virtually all parents – the only exception being those who are already very wealthy. For the rest of us, we need to plan for the unwanted chance that we might die while our partners or children are still relying on us.
Children and partners are dependent on anyone who is a ‘breadwinner’ in the family, which increasingly means both parents where they remain together.
But, perhaps especially in the case of special needs children, it makes really good sense to insure both parents regardless of whether they do paid work. The death of a primary carer usually means that the surviving parent needs themselves to become the primary carer. This can make also being the primary earner very difficult.
Even when parents separate, it pays for the parents to retain their life insurances with scope for the other parent to be provided for, because the death of one parent usually passes all the responsibility back onto the other parent.
Life insurance has been around for centuries. These days, the really good news is that death cover – the form of life insurance that pays a benefit if you die – can usually be accessed via the superannuation system. This can make cash flow much easier to manage, which is really important during the high cost years of raising children. Which are, of course, the years when we most need insurance.
Put very simply, life insurance is a great way to keep Centrelink out of you or your loved ones’ life. So, if there is someone who would suffer financially if you become unable to work due to death or disability, please talk to us ASAP.
