Why Stay-at-Home Parents Should Consider Life Insurance

The spouse who doesn't earn a paycheck may be managing the entire household alone. Stay-at-home parents should consider life insurance to help cover the job.

If you’re a stay-at-home parent, you manage the kids, the housework, the groceries, the cooking, the chauffeuring, the accounting, the appointments and more. But what happens if you die, and who will take care of your loved ones? Unfortunately, most families don’t have a plan for this, which is why stay-at-home parents should consider life insurance. But unlike the family breadwinner, they tend to be uninsured.

As a stay-at-home parent, you might not earn a paycheck, but the things you do every day would cost a lot to replace. According to salary.com, a typical stay-at-home mom’s work equals a $112,962 annual salary. What you do is incredibly valuable and should be covered if something happens. Here are some of the ways life insurance can benefit your family:

Child Care Costs

Without you around to take care of your children, one of the biggest expenses your family will have is the long-term costs of child care. Someone must watch your young kids while your spouse is working. Your children also need to be taken to school, the doctor, sports practice, etc. Somebody must drop them off and pick up them up if you aren’t around. That likely means hiring a caretaker, which is a line item your family did not have in the budget before. Stay-at-home parents should consider life insurance to help provide resources so your kids are looked after properly and your spouse can continue earning income.

Housework Costs

Maintaining a home by cleaning, shopping and cooking is a huge job. If you’re gone, some of these chores can be covered by your spouse when he or she isn’t working, but chances are good that outside help will be needed. Hiring housekeeping or laundry services can be a big expense without life insurance to help cushion the financial blow.

Emotional Distress

When any parent dies, the family left behind will face a difficult adjustment period, emotionally and financially. Life insurance can help make that process a little easier for your family. Insurance payments could help pay for counseling to support your loved ones with the pain and grief. They can also allow your spouse to take time off after you’ve passed away, or give her the option to work fewer hours, temporarily or permanently. Life insurance can provide your family the time to adapt to new circumstances without worrying about money.

Debts

You and your spouse probably have joint accounts and share debts, like a mortgage or student loans. You may also have debts of your own. Those commitments will be much harder to pay off if you are no longer around, due to all the extra costs outlined above. Life insurance could help make payments more manageable for your family.

Purchasing Life Insurance

You have a few options if you decide to buy life insurance. As a stay-at-home parent, you may be able to get coverage by buying a “rider” on your spouse’s policy. Some riders offer the exact same coverage that your spouse enjoys, while others may offer only limited coverage. A rider can also be more expensive than purchasing a stand-alone policy. Another option is whole (or permanent) life insurance, which offers lifetime coverage at a level premium. This life insurance has potential to build in cash value. Finally, there is also term life insurance, which is a relatively large amount of insurance purchased for a low initial premium. This is temporary coverage that you pay for only when you really need it.

When considering life insurance, be sure to talk to a financial professional about your specific needs and how life insurance can help. To get tips on budgeting with your spouse as a couple, read “Easy Financial Tips for Couples.”

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