Aviva has bowed to pressure from financial advisers and consumers to tackle the underinsurance crisis and has increased its life insurance cover for stay-at-home parents to $1 million.
Homemakers can now apply for higher limits on life insurance through Aviva's Protectionfirst product range, which previously only offered cover up to $750,000.
Aviva said the sky rocking cost of childcare could devastate a family if the primary carer died.
It is clear that the financial consequences if the unthinkable was to happen would be severe, Aviva general manager wealth protection Natalie Eckersall said.
"Many parents choose to stay at home at some stage in their lives and in the past the cover available just wasn't enough," she said.
"We know homemakers are underinsured in Australia because of a perception that they don't earn income so there is no need to insure them - and this simply isn't the case," she said.
The cover offered is more than twice that of a similar product that Suncorp launched last year. Suncorp's Family Protect cover provides benefits of up to $400,000.
Suncorp's research found only one in four women aged 30 to 45, whose husband earns the larger or only income, is covered by life insurance.
Aviva also announced it will provide life cover for employees in the mining industry and professional sporting arenas, areas that are traditionally deemed too high-risk.
