We all think of life insurance as a way to replace household income in the event of the loss of a spouse or partner. Typically, life insurance covers the income of the working spouse(s). But what about a stay-at home spouse? Should you consider the costs or value of all work that they perform?
The answer is yes. Equally important to maintaining the income of a household are the contributions of a stay-at-home spouse. In addition to the emotional support, which is invaluable and irreplaceable, these spouses provide significant support to their families’ financial health. The stay- at-home spouse is typically responsible for childcare, including the care of a sick child or one with special needs, household maintenance, errands, transportation, lawn care, meal preparation and more. Some studies have estimated the cost of retaining such services is as high as $175,000 per year annually. Childcare expenses alone average $11,000 to $29,000 per year and the costs are only rising. The time and expense of providing transportation to and from school and outside activities also adds up and increases with the number of children in a household. Management of a home requires cleaning, repairs, maintenance, and coordination, particularly if the income earner works long hours, including weekends, or travels. Entertaining is another aspect of the innumerable responsibilities that often fall to the stay- at- home partner.
Determining how much life insurance you may need depends on the situation. There is no one size fits all. Some important considerations include age, whether you expect to work outside the home at some point, the number of children and their ages, whether the children are in school or need day care, the size of your home and whether you will need a housekeeper, someone to prepare meals, or manage the day-to-day activities.
While these questions are difficult to consider, planning today will help protect your family in the future.