Here’s Why Stay-At-Home Parents Need Life Insurance

Just because you’re a stay-at-home parent and don’t bring home the bacon doesn’t mean you don’t need to have life insurance. Whether you give yourself the title of household babysitter, cook, housekeeper or chauffeur, the services you provide could cost a lot for your family if you were to pass away.

Household Expenses

Of course, you can’t be replaced, but someone can be hired to help keep the family functioning as best as possible under tough circumstances. A life insurance policy can help with childcare. According to the National Association of Child Care Resource and Referral Agencies (NACCRA), full-time infant care costs an average of $16,000 a year, and after school care averages $11,000 per child on an annual basis. If you have a spouse who works at night or travels, the costs for child care can even be higher. If you’re uncertain how much of an insurance policy to take out, some financial gurus today recommend a $400,000 to $500,000 life insurance policy to make up the costs. With the lump sum that your family receives from the proceeds of your policy, your family will be able to maintain their lifestyle.

Ongoing Financial Obligations

The proceeds from the life insurance policy will also help avoid forced debt. Like most families, you probably have a mortgage, car loans and other rolling expenses. A stay-at-home parent with life insurance can help ease the burden of the surviving spouse with having to pay these ongoing expenses in the event of your death. Having access to money in a timely fashion with a life insurance policy will certainly help avoid financial stress at a tough time when the family is grieving your loss.

Children’s College Education

A life insurance policy can also help pay for your children’s college education. Keep in mind that if you have young children, the price tag of a college education is likely to be much higher when your child reaches college age than today’s tuition costs. According to the College Board, public college tuition in 2015 will average $26,000 a year and is expected to increase to $35,000 by 2020.

Funeral Expenses

Today, the average funeral costs range about $10,000. Having a life insurance policy will ensure that your loved ones are not saddled with this expense. When making funeral arrangements, the last thing a family needs is to be worrying about how to pay for it. Financial stress will just add another burden for them.


Even if you’re not a stay-at-home parent, life insurance is important for every family. Everyone’s lifestyle and personal circumstances are different, and it’s important to select the right kind of life insurance that best meets your unique needs. Today, it’s easy to find the best rates for life insurance online. You can do a search and compare rates at industry insurance sites. Getting life insurance will give you the peace of mind that you need knowing that your family will be taken care of if anything should happen to you.

source: marriedwithdebt.com

How Much Life Insurance Does a Stay-at-Home Parent Need?

Generally, financial gurus recommend that you get 5-20 times your annual income in life insurance coverage. But what if you have no income because you’re a full-time stay-at-home parent? Or what if you contribute a few hundred bucks a year to the family bank account with your side job while you mostly stay home with the kids?

We all know that anything times zero is zero, but that doesn’t mean that a stay-at-home parent should not have life insurance.

In fact, as a stay-at-home parent, you make hugely valuable contributions to your household, contributions that would cost your family a pretty penny should something happen to you.

According to a recent Salary.com survey, the services of a stay-at-home mom in 2012 (sorry, dads, you weren’t part of the survey this time) would cost about $113,000 if you had to outsource those services. The survey looked at the services provided by a typical homemaker, including housekeeper, child care, chauffeur and more. If you had to outsource all those services, you’d pay a lot to do it.

But does that mean that a stay-at-home parent needs more than $1 million in life insurance? Probably not.

The truth is that in single-parent households, not all of these services are outsourced. Yes, if something happened to you, your spouse would have to pay for day care and would probably like to pay for extra services like housekeeping. But plenty of working single parents clean the house, make the lunches, plan the doctor’s appointments, run to school and soccer practice, and work.

The Goal is Something In Between

 

While your stay-at-home parent services are invaluable for your family, you don’t want to wind up with more life insurance than you can afford. So when you’re deciding how much term life insurance coverage to buy for yourself, you’ll have to do some personal calculations and some hard thinking.

Here’s one process for deciding how much life insurance to carry on the stay-at-home parent in your family:

First, talk about what life would look like if that parent died. No one likes to think about this possibility, but to make good life insurance decisions you must.Which services would the surviving spouse need or want to outsource? Look into the cost of full-time child care in your area and include that in your calculations.You may also want to check out things such as housekeeping services.

Remember to look at the ways a stay-at-home parent saves your family money, as well. For instance, many stay-at-home moms are able to shave hundreds off the monthly grocery bill by meal planning, couponing and cooking at home. If something happened to this parent, the family’s food costs could go up quite a bit.

Also look into counseling services. If something happens to your children’s primary caregiver, chances are they’ll need some professional help to cope in a healthy way. How much would some basic grief counseling or therapy cost your family?

Again, it’s not fun to think about these possibilities, but it’s essential to choosing the right amount of life insurance for a stay-at-home parent.

Second, research how much life insurance coverage would cost. Term life insurance rates are typically low. But if you’re a one-income family living on a tight budget, you may not be able to afford much coverage. On the other hand, if rates are very low, you might be able to afford the luxury of more coverage.

The key is to make sure you can pay for it, even if you get into a tight place financially. Not paying your premiums can result in a termination of coverage, which is not a place you want to find yourself.

Finally, choose how much coverage you want. Your best bet is to apply through a broker, so you can get the best deal on the amount of coverage you need. It’s also easy to get life insurance quotes online.

Having the right type of life insurance coverage for both parents in a family can give you peace of mind, knowing that you’re protecting your family, and especially your children, in the worst possible circumstances. If one partner in your family stays at home with the kids, figuring up life insurance can be more complicated, because you can’t just multiply your annual income. But taking the time to figure out how much life insurance the stay-at-home parent needs is an important step in making sure your family is well protected.

source: doughroller.net