Can a dollar value be placed on a homemaker?

The diverse and demanding responsibilities of a homemaker are often taken for granted, but if you look closely their ‘dollar value’ can be immense.

Despite all the advancement in the equality of women in modern society, they still carry the bulk of homemaking responsibilities. Regardless of whether it is by choice or necessity, an estimated 42 per cent of women are outside the paid workforce1 – many of them because they choose to remain at home to care for children and run domestic affairs.

There is no doubt that homemakers provide an invaluable role in modern society, but that value is seldom measured in dollar terms. When it comes to planning for family security and continuity it is important that the dollar value of a homemaker is properly recognised.

There is no doubt that homemakers provide an invaluable role in modern society

Dollar value does matter
A scenario where a homemaker is suddenly unable to work owing to premature death, serious illness or injury will bring the question of their dollar value into focus. While the first concern for a family in this situation is the enormous emotional impact, the long-term reality is that the practical contribution the homemaker provided will need to be replaced in one way or another. This can leave the family in dire financial difficulty as the surviving parent must find ways to fulfil the homemaking role.

Insuring the homemaker’s life provides ready cash that will give the surviving parent the means to either:

  • leave work and take on the homemaker’s role themselves full-time, or
  • employ expert help to fulfil the duties of caring for children and managing the home, or
  • a combination of reduced working hours and bringing in hired help for specific home duties. 

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How is it possible to create a dollar value on a homemaker’s role?

Measuring the financial loss
So how is it possible to value a homemaker’s role? In some respects, trying to put a figure on it may seem to be trivialising a role that is often performed in a selfless way. Nonetheless, by breaking down the various responsibilities a meaningful insurable value can be arrived at. This may include:

  • Supervision and care of children or grandchildren during the working week,
  • Household cleaning,
  • Laundry,
  • Gardening and home care,
  • Home management, such as banking, bill payment and arranging tradespeople,
  • Shopping,
  • Cooking,
  • Transport for school and other kids or grandkids activities.

Deciding on a strategy
Some families may decide that it is vital to keep the breadwinner bringing in an income, while others may feel that the surviving parent should take on the homemaking roles. There is no right or wrong way to do this, but both approaches will involve costs that can only be funded via a sound insurance plan.

The important thing is for families to discuss the issue seriously and decide what approach would be taken. The amount of money required to put the chosen strategy into practice can then be calculated.

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Seek personalised advice to help decide which insurance policy works for your situation

Let’s take the example of a family who decide that the breadwinner would leave work permanently to take on full-time home duties.

  • They have a $200,000 mortgage that they want paid off immediately
  • They want to replace 75% of the breadwinner’s $80,000 income = $60,000.
  • Assuming a return of 7%, a sum of $860,000 would need to be invested to produce that income, (assuming they want to preserve the full investment capital)
  • The total life insurance cover on the homemaker would therefore need to be: $200,000 + $860,000 = $1,060,000

Three types of cover can be placed on the homemaker to protect from different types of risks

What type of cover is needed?
There are three types of cover that can be take out on the homemaker to protect from different types of risks.

1. Life insurance – in case the homemaker dies

2. Total and permanent disability (TPD) insurance – in case they suffer a major health condition that would permanently stop them from performing home duties.

3. Trauma insurance – to protect against certain major health conditions, such as heart attack and cancer, which may cause a temporary inability to perform home duties (usually requiring a lower sum insured than the life and TPD cover)

A professional financial planner can help you develop a strategy to get the right mix of insurance to cover the loss of a homemaker.


1ABS: Labour Force, Australia, January 2013: Labour Force Status by Sex - Seasonally Adjusted

Do you feel a homemaker’s role needs to be properly valued and protected? Join the discussion below.