A quiet trend in America is the growing number of single-income households, largely run by stay-at-home spouses. If this is the case for your family, it’s likely that you and your spouse have life insurance protection for the breadwinner of your household. However, have you given thought to how you will protect the financial and emotional security of your family should the stay-at-home partner pass away? If not, now’s the time to think about securing life insurance for your family’s stay-at-home spouse.
The contributions of a stay-at-home spouse are incredibly valuable
Few people consider the “market value” of services performed by a stay-at-home mom or dad, but if you do, you’re likely to experience sticker shock. Childcare, home cleaning and maintenance, meal preparation, and many other time-intensive tasks such as laundry and grocery shopping would cost tens of thousands of dollars per year if provided by a third-party. To cover these costs, and to provide the option for a grieving spouse to take time away from their own job in the event of the death of a stay-at-home spouse, it’s crucial to have appropriate life insurance protection.
How much life insurance does a stay-at-home spouse need?
The amount and type of life insurance protection is unique to each family and is based on their needs and resources. Our insurance professionals can help you determine the appropriate amount of life insurance your family needs. Many people choose to purchase life insurance for a stay-at-home spouse based on an estimated annual salary for the services they perform for the family, times the number of years before their youngest child completes college, depending on other available income or resources. In addition, you may want to factor in other costs related to the death of the stay-at-home spouse including funeral costs, medical expenses, legal fees, estate taxes and inflation.
There are two common types of life insurance for stay-at-home spouses.
The two basic types of life insurance protection to consider: term and permanent.
Term insurance provides life insurance coverage for a specific number of years – usually five to 20. Generally speaking, term life insurance is available at a lower cost than permanent insurance. However, it’s important to note that once a term life insurance policy expires, you lose the protection it provides. Also, if you plan on renewing your policy for a number of years, the long-term costs can add up.
Permanent life insurance provides protection for an individual’s entire life and accumulates cash value, tax-deferred. The cash value of a permanent life insurance policy can be borrowed against to fund education, a home purchase, or even to supplement retirement income. However, any unpaid loans against the policy will accrue interest and reduce the permanent life insurance policy’s cash value and death benefit.
Put life insurance coverage for a stay-at-home spouse in your insurance plan.
The value of the work of a stay-at-home spouse is often overlooked, but the financial contribution they make to the household is often just as much as someone employed outside of the home. So, yes, purchasing insurance coverage for a stay-at-home spouse is an important part of ensuring that your family is well taken care of. A life insurance policy for a stay-at-home spouse can prevent financial hardship from compounding the already difficult emotional loss of a parent and partner.
The best type of insurance protection for you depends on your specific needs, so let’s talk! Contact one of our insurance professionals today to learn more about the options available to you.
Hallie Earl, of Marcellus, works out of our Cassopolis, MI location in our personal lines customer service department. Hallie enjoys playing house, dress-up and dancing with her almost 6-year-old who is extremely active & girly (which is quite opposite of her mom). Hallie is a graduate of Marcellus High School, is an avid U of M fan and enjoys shopping, sports, gardening, and just relaxing in her spare time.
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