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Why Should a Stay at Home Parent Buy Life Insurance?

Life insurance at age 33
 

Life insurance is one of the best ways to ensure that your family has the insurance protection that they deserve. Most applicants assume that if Should a stay at home parent buy life insurance? stay at home, that they don’t need a life insurance plan because they don’t bring home a paycheck, but is that true?

Many families with children are fortunate enough to have a parent stay at home to maintain the household, take care of the children, and oversee everyday life. Should a stay at home parent buy life insurance since they do not bring home a paycheck every week? My answer would be “Yes!” If you break down the duties a stay at home spouse has, it adds up to a lot. They are a nanny, cook, maid, grocery shopper, tutor, bill payer, and chauffeur to name a few.

According to a recent study by Salary.com, the average stay at home mother in the United States works 96.5 hours each week for 2014, on average, this is an annual compensation of $118,905. You can argue if this amount is really in the ballpark. Even half that amount would have a significant impact on many households.

Imagine replacing this person should they die unexpectedly. Not only is there the emotional aspect of this loss, there is a loss of someone who kept the household going.

Life insurance can cover tangible services that a stay-at-home spouse provided, especially important if the remaining spouse is left with the sole responsibility of caring for children or elders, said Herb Perone, a spokesperson for the American Council of Life Insurers.

When you are looking into purchasing life insurance on a stay at home mom, many areas need to be considered. Several of those are mentioned above, but others still need to be addressed. There have been instances when the parent of a family dies and the remaining spouse has had to quit their job for a period of time in order to support the children emotionally and to try to keep their lives as normal as possible. This means the loss of income. If there is not a substantial amount of savings, this can be difficult or almost impossible for some families to do.

How much life insurance should you purchase for a stay at home mom? Consider these areas of expense:
• Childcare
• Cooking – lack of it can equal more dinners out and increased spending on food
• House cleaning
• Transportation for the children
• Someone to pay and manage the household bills
• Tutor – many parents help children with their schoolwork
• Pay off mortgage balance
• Possibility of remaining parent needing to step away from work for a few years

If the youngest child in your family will graduate college in 10 years and you determine that the approximate value of the duties performed by the stay at home spouse is $55,000, then you will need to purchase $550,000 in life insurance. This does not consider paying off an existing mortgage nor providing additional income if the remaining spouse needs to leave work for a period of time. You may also want to include final expense costs into a stay at home spouse’s life insurance policy as well.

Most couples realize that they need life insurance for the breadwinner of the family, but often times the stay at home spouse is overlooked. Since actual funds are not being paid for the endless services the stay at home parent is providing, it doesn’t cross your mind that all of those services would go away if that parent died. Unless the remaining parent takes over all of these tasks, they will have to be paid for and performed by an outside party.

Should a stay at home parent buy life insurance? We think so.

We can help you determine how much insurance would be appropriate for your family should you have a stay at home spouse/parent. We will assess your family’s current situation and guide you to figure out how much and which type.

You want to protect your kids, but life can throw some curve balls. The only way you can protect your family against the unknown is to have the proper insurance plans in place.

There is a life insurance quoter to the left on this page that can help you get started in determining how much a life insurance policy will cost. Again, we can help guide you with this decision. Just give us a call at 1-800-712-8519 or use the contact us tab.

Frequently Asked Questions

Should a stay at home parent get life insurance?

My answer would be “Yes!” If you break down the duties a stay at home spouse has, it adds up to a lot. They are a nanny, cook, maid, grocery shopper, tutor, bill payer, and chauffeur to name a few.

How much life insurance should you purchase for a stay at home parent?

Consider these areas of expense:
• Childcare
• Cooking – lack of it can equal more dinners out and increased spending on food
• House cleaning
• Transportation for the children
• Someone to pay and manage the household bills
• Tutor – many parents help children with their schoolwork
• Pay off mortgage balance
• Possibility of remaining parent needing to step away from work for a few years

Why is it a good idea to buy life insurance on a stay at home parent?

There have been instances when the parent of a family dies and the remaining spouse has had to quit their job for a period of time in order to support the children emotionally and to try to keep their lives as normal as possible. This means the loss of income. If there is not a substantial amount of savings, this can be difficult or almost impossible for some families to do. This is where the death benefit of a life insurance policy would help supplement these financial losses.

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