Have you ever felt that being a stay-at-home parent is more than a full-time job? Well, you’re right. With all of the responsibilities you juggle, in addition to taking care of your children, you’re probably pulling some serious overtime hours. In fact, Salary.com suggests that between managing household expenses, repairs, child care, pet care, food shopping, cooking, cleaning, and transportation, stay-at-home parents put in an average of 94.7 working hours a week. They also estimate that the value of all of this labor is equivalent to over $162,000 per year – a figure that could easily rival a working partner’s yearly income. Yet, despite a stay-at-home parent’s significant household contributions, it’s often only the “breadwinner” who thinks he or she needs life insurance coverage.
Insuring only one parent in a two parent household is a risky move when you consider the family’s full financial health. But families are sometimes unaware of this because they have made one of the following three assumptions:
- They believe that the life insurance provided by the working partner’s employer is enough
- They haven’t considered the repercussions of not covering the stay-at-home parent
- They assume that it’s too expensive to cover both adults in their household
These assumptions often turn out to be false, so it’s important to understand the reasons why life insurance is so critical for stay-at-home parents.
1. Life insurance offered by employers is often not enough
Many people assume that the life insurance issued by their employer is enough to take care of their family, but that’s generally not the case. Once you look into your partner’s employer’s policy, you may discover that the life insurance included as part of their work benefits package is only 1-2 times their annual salary or limited to a small dollar amount. That is how companies can very affordably offer this benefit – sometimes even at no cost to you.
As a point of reference, a person’s life insurance coverage amount can be recommended to be anywhere from 10-20 times their annual salary. It can even be up to 25 times their salary, if they have a young family, and are just starting out. So, a 1-2 times salary policy can leave a pretty large gap. If the life insurance offered by your employer is free to you, you should absolutely take advantage of it, but don’t let that stop you from getting what you and your stay-at-home spouse really need.
2. The costs of not having coverage can be crippling
It is easy to calculate the financial hardship a family would face if the breadwinner was to die unexpectedly. However, if something unexpected was to happen to the stay-at-home parent, the cost of the professional help required to cover just a fraction of the stay-at-home parent’s responsibilities would be incredibly expensive as well. According to Care.com, babysitting fees can range from $15-20 per hour, and even if you only have care from after school until dinnertime Monday – Friday, that can add up to an additional $30,000 per year. Likewise, Handy.com estimates that a twice weekly cleaning of a typical 4 bedroom 2 bathroom house comes to around $150 per cleaning, which over the course of a year ends up being well over $14,000. Added together, that’s an additional $44,000 annually just to start things off, not even covering all of the professional help your family would need to maintain household logistics. Tutors range from $30-80 an hour, dog walkers range from $15-30 an hour, and the list goes on…
You can price out the costs of all of the professional help the working partner in the household would need to hire, but there are other, hidden, expenses that you’d need to take into account, too. For instance, if your partner isn’t particularly adept in the kitchen, the family will likely go out to eat more often, buy more expensive ready-made foods from the grocery store, or hire cooking help, which can add up to another huge monthly expense.
The bottom line is this: the professional labor required to keep your household afloat if you are no longer in the picture is likely far more than your partner would be able to afford. And your partner trying to take on everything (all household and all professional responsibilities) might be overwhelming, potentially putting his or her job (and your family’s financial well-being) at risk.
However, if the stay-at-home parent has life insurance in place, that changes the situation. Should something happen to you, your partner would be able to get help with all of the day-to-day tasks required to keep your household running – and that could mean a world of difference to your family during a difficult time. So, when you sit down and consider the costs of not having life insurance coverage for the stay-at-home partner in your family, the decision of whether or not to get a policy for both parents should become pretty clear. Your contributions to your family’s well-being are critical and investing in your family’s future will bring both parents financial, and emotional, peace of mind.
3. It’s more affordable than you might think – even for both of you
Life insurance is often far less expensive than people expect it to be, and figuring out exactly how much you and your partner would pay for full coverage can take just a few seconds. With today’s technology, you can eliminate a lot of the paperwork and agent meetings that used to be required. An online life insurance partner can give you a quick and accurate estimate for your best policy option based on your answers to a few simple questions.
Ready to check out how affordable term life insurance can be for both of you? Follow these next steps:
1. Understand how much coverage you need. The best way to estimate your coverage is to use an insurance calculator and answer a few quick questions. It only takes a few seconds, and it’s extremely helpful to see how cost effective life insurance can be. Term life insurance is the best option if you want good coverage while your children are young (or while your aging parents might need extra help), but don’t want to be committed to paying 40 years from now, when you have less responsibilities and might not need as much coverage. (Here is a post on the different types of life insurance and why we’re a fan of term policies).
2. Get an estimate. Request a free, no-obligation estimate in minutes. It will show you how much you could expect to pay each month for coverage. You can easily reduce the coverage to fit your budget and you can always apply for more later. Some policies start at less than $10 a month so there is no reason not to start checking out your options.
3. Get covered. If the quote works for you, the process to apply for coverage can take less than 10 minutes, and you’ll get an immediate decision. If you accept an offer, coverage will begin immediately and you can cancel your policy at any time, no questions asked. Also worth noting is that Ladder’s life insurance is dynamic — so you can apply to ladder your coverage (and payments) up or down as life evolves and your needs change.
Life insurance is an important piece of your family’s security. Spending a few minutes now to set up the right coverage for your needs will enable you and those you love to focus on what you love most, so you can get the most out of life and all it has to offer.