Could you do without mum for 4 weeks?

Many people celebrating Mothering Sunday this weekend will no doubt conclude our mothers are priceless and we couldn't do without them even for a day. But most insurers offering homemaker's cover under income protection plans would not pay out for 4 weeks leaving a potentially, large financial gap for stay at home mums.

Ben Heffer, Insight Analyst at Defaqto commented: "Many families have no strategy for coping if the homemaker were long term sick or disabled and could no longer run the home and care for the children. This is surprising considering the repercussions of them not being able to perform this role are as wide as for the traditional ‘breadwinner' of the family. Often this is because of the perception that no "income" as such is associated with this role where it could equate to £18,500 or more. Putting the right plans in place could mean financial support of up to £250,000 per year.

Mr Heffer continued: "in the event of being unable to do your job as a result of an accident or long term sickness, an income protection policy pays a monthly benefit equivalent to a proportion of your income. 27 insurers offer these polices to cover ‘housepersons' too and pay out if basic activities of daily living cannot be performed".

Stay at home mums should consider the following which will impact the cost of cover:

1. The amount of benefit chosen

For housepersons and those not in employment, the benefit is often limited to a lower amount. The benefit amount chosen will be paid less any other insurance benefits the person has. The maximum benefit varies widely ranging from a basic £1,500 up to £250,000 per annum. The most common amount is £12,000 a year.

2. The waiting period

This is the period of time before the benefit starts to be paid after a claim, typically 4, 8, 13, 26 or 52 weeks. Holloway style plans from friendly societies can offer cover from day 1.

In view of the fact that houseperson's benefit is paid out only in cases of severe disability it would not be unreasonable for insurers to consider offering shorter waiting periods for houseperson's cover particularly given that in view of current economic environment many families would struggle if the homemaker were unable to care for the children and run the house.