When it comes to purchasing life insurance many would believe it’s purchased primarily for the working spouse. A major factor when purchasing a life insurance policy is to replace lost income, but what about the stay at home spouse?
Should life insurance coverage for stay at home parents be considered?
Life insurance coverage for stay at home parents should never be overlooked just because they are not earning a salary. Financial contributions from a stay at home parent come in many other ways other than wages and salary.
LET’S TAKE A LOOK AT SOME OF THE EVERYDAY ROLES A STAY AT HOME PARENT PERFORMS:
- Cleaning Bills / Paperwork
- Teacher / Tutor
- Child Care
- Grocery Shopping
- Possibly caring for elder parents
Think about what it would cost if you had to hire someone to fulfill all of the roles of a stay at home parent. Take the annual cost to perform those roles and multiply it by the number of years you would need assistance with those roles.
Your answer is easily going to be in the $100,000+ range.
Proceeds from a life insurance policy could easily assist you in taking care of the above roles, should you suffer the loss of a stay at home spouse.
Most of the roles performed by a stay at home parent will obviously not be needed when the children are grown and have left home to be on their own.
It makes perfect financial sense to consider purchasing a life insurance policy for the stay at home parent long enough until all the children in the household have reached the age of 18 and the need for coverage is not as high.
Term life insurance would be the best and most affordable option for this scenario as you can choose a plan that has fixed premiums for a certain period of time while the need for coverage is at its highest point..
How Much Life Insurance Coverage is Needed?
Determining the correct amount of life insurance coverage for stay at home parents will vary from family to family depending on their own unique situation.
General life insurance factors should also be taken into consideration such as debt, medical expenses, and burial expenses when determining a proper death benefit.
Here are two simple methods to help determine how much life insurance coverage for stay at home parents should be purchased:
- Calculate the annual cost to replace the everyday roles provided by a stay at home parent. Take the annual cost and multiply it by the number of years that you would need cash to replace those rolls. This method will provide you with a general death benefit as well an idea of the length of term policy you should be considering.
- Another method of determining coverage for a stay at home parent is to take the annual salary of the parent working and multiply it by 2. This method would be used to provide enough income for the surviving parent to make his or her career secondary for at least a few years while devoting more time to the children.
The salary earner as well as the stay at home parent both play very important roles in caring for the family.
Both parents, salary earner and the stay at home parent should have life insurance coverage. By having an appropriate amount of coverage purchased on the stay at home parent, your family will have the peace of mind knowing that should the worst happen your lifestyle will be protected.
Life insurance coverage for stay at home parents is something that should not be overlooked. Call us toll-free at (888) 777-7574 to discuss coverage options or simply leave us a message and a licensed Top Quote Life Insurance will help assist you.