Do Stay At Home Moms Need Life Insurance
Do Stay At Home Moms Need Life Insurance?
final expenses, reducing estate taxes, and keeping a business afloat should an owner or partner pass away unexpectedly.While it is often said that life insurance is purchased in order to replace a breadwinner’s income, the proceeds from these policies are also used for many other purposes as well, such as paying for
One area where life insurance is not always considered – but should be – is with non-working, stay at home spouses. Consider, for example, the many important jobs of a stay at home mom. These duties typically include cooking, cleaning, driving carpool to and from school, arranging other daily activities for the children, and taking charge of overall child care.
If you were to add up the cost of hiring outside help to take over all of these essential roles, the dollar figure would likely be substantial.
Taking a closer look at each can give you a better idea of just how much life insurance coverage a stay at home Mom’s duties are worth solely from a financial standpoint.
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Depending on the size of your home – and the extent of the actual job – the tab for a single house cleaning typically runs between $50 and $150. Taking an average of $100 to clean your home one time per week comes to a total of $5,200 per year.
Although early and mid-day meals for the children may be provided at daycare or at school, it is likely that meals would still need to be prepared in the evenings and on weekends both for children and for the remaining parent.
This would especially be the case if the remaining parent would need to work extra hours or take on a second job in order to make ends meet after the loss of their spouse. Here, too, the cost of meal preparation could easily average $100 per week – exceeding $5,000 per year.
Hiring a Nanny
Rather than separating out all of the individual duties of a stay at home mom, you could go an alternate route and hire a nanny to care for the children, as well as to cook and clean. According to Nannies4Hire.com, the national average gross weekly salary for full-time live-in nannies in 2012 was $652.
This amount varies, however, by area of the country, as large metro areas usually command higher salaries than smaller rural locations. The nanny’s experience and background will also play a factor in the pay that they command. Using just the average figure, though, the annual cost of hiring a nanny would be just under $34,000.
Taking the Next Step
While no parent can ever be replaced, it is necessary to plan for the unexpected. In doing so, an already difficult transition can be made at least somewhat smoother for the children that are involved.
In determining the amount of life insurance coverage to place on a stay at home mom, it is important to come up with the approximate costs that would be incurred to replace all of her duties, and then multiply those costs by the number of years that those services would be needed (likely until the youngest child turns age 18). It is also essential to factor in the effect of inflation on all of these expenses throughout the anticipated time period.
Because our lives are constantly changing, it is also important to regularly evaluate the amount of life insurance that you have. This is especially the case if you encounter any major life events such as marriage or divorce, a birth or death in the family, the purchase or sale of a home, or a change in employment status.
Just as with placing the proper amount of life insurance on the breadwinner, having appropriate coverage on a stay at home mom is an essential part of any family’s overall financial plan, as without it, other essential savings and assets could quickly go unprotected as well.
Liran Hirschkorn is an independent life insurance agent and founder of BestLifeQuote.com. His mission is to help individuals across the U.S in finding the best rates on life insurance as well as helping those that have previously been declined get approved for coverage. Liran looks forward to speaking with you about your life insurance needs.