Why Stay-at-Home Parents Need Life Insurance

We tend to think of life insurance as income replacement; in many cases, it is one of its primary purposes. However, if your household is one of the many households with a stay-at-home parent, you may be surprised to learn about some of the reasons both parents need life insurance. Growing your family is an emotional and exciting time. But as your family grows, it’s time to start planning for the future, requiring expert advice and research. Ideally, when trying to determine the amount of coverage you need, you want to be able to settle your debts first so you don’t leave major expenses behind for your loved ones. A few other additional areas to consider are:

• Your income
• Net worth
• Family Needs
• Debt
• Other insurance you have

For stay-at-home parents, many think they don’t need coverage because they don’t fit the first bullet point. That isn’t true if you consider your role’s impact on your family’s financial future.

The work of a stay-at-home parent can’t be replaced for free.

When we look at life insurance as income replacement and note that one parent has no or very little income, it may be easy to think you need no life insurance for that parent. You should not overlook the value a stay-at-home parent brings. Think of all the new expenses your family could face if you suddenly lost a stay-at-home parent. You will have to consider who handles childcare, transportation, housekeeping, cooking, bill paying, dog walking, and a laundry list of other services (probably including laundry itself). These services would likely need to change for many years to come.

Don’t forget about future income.

Stay-at-home parents don’t always stay at home forever. Kids reach an age where they are more independent, and it’s common for both parents to return to work. Waiting until there’s an income to replace can be a costly choice. Not only do you lose preparedness for all the services you may need to replace, but waiting until the kids are older also costs more in the form of higher premiums. Life insurance rates increase with age. Some of us are younger than others, but none are getting any younger.

Settle debts to protect the family’s future.

Finding a young family that isn’t carrying some debt to make ends meet is challenging. Whether it’s a mortgage, a car payment, or a few stubborn credit card balances, life insurance can help put these debts behind. Giving your family the helping hand it needs to get through an already difficult time is the purpose of this protection.

If you don’t have coverage for all the adults in your household or aren’t sure how much life insurance you need, reach out. We can discuss your options and design a customized coverage strategy to meet your family’s needs.

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