Head of Mortgages and Insurance Stephanie Charman highlights the value of unpaid work and how protecting your clients could extend beyond just the breadwinner.

It is easy to assume that financial cover is only needed for those in employment, to ensure loved ones are protected if they are unable to work. But provider Legal and General have challenged that assumption and calculated the ‘value of a parent’, revealing that protection is very much needed for unpaid work parents do at home as well.

This raises the possibility to discuss protecting the non-breadwinner of the household with your clients. After all, if they were unable to do the important unpaid work they do due to long term illness or even death, the breadwinner will most likely need to take time off or pay to cover the necessary chores and look after children.

The real cost of parenting

In a 2015 report, Legal and General found that most people underestimate the value of the unpaid work that they do. When asked to calculate the overall cost of raising a child to the age of 18, parents on average estimated the cost to be £123,365, when in fact it is as much as £184,392. This breaks down to £10,244 a year, or £197 a week. Most people underestimate the sheer number of hours they spend on unpaid work such as chores and childcare.

The value of Mum and Dad

To put things into perspective, Legal and General also calculated the annual salary that the unpaid work equates to for parents in the UK. On average, a mum’s value is £29,535 a year, with the value of a dad coming to £21,601. When asked to estimate this figure, people perceived the “salary” to be £16,796 for mums and £16,120 for dads, some way shy of the actual cost.

Potential client scenarios

Has your client considered what would happen if the non-breadwinner of the household was unable to do the unpaid work? If a couple were to prioritise the breadwinner’s protection, how would they cope if either of them were unable to do the unpaid work for an extended period?

These scenarios are very much worth considering with clients when talking about protection, such as critical illness cover and life insurance. Solutions such as Legal and General’s Family and Personal Income Plan (FPIP) pays out a monthly benefit to deliver the financial support if a policyholder is unable to do any kind of work due to illness or death, whether paid or unpaid.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.