Life insurance is a no-brainer for families where both the husband and wife work outside of the home. But single-income families often neglect the value of all the work the stay-at-home spouse accomplishes every day. If the stay-at-home spouse passes away, how will the surviving spouse keep his or her job and accomplish all the things their spouse used to do? That’s why life insurance for a stay-at-home spouse can be a very important part of your financial plan.
How Much Insurance?
To figure out how much insurance you need, you have to know how much income you need to replace. But what’s the value of the work a stay-at-home spouse does? This will largely depend on your personal situation. If you have children, the value of a stay-at-home spouse is going to be much higher than it would be for a family without children. Considering all the cooking, errands, child care, laundry, cleaning, and various other things a stay-at-home spouse can accomplish, you should consider the value of that spouse’s work as equivalent to a full-time job.
Many life insurance companies will provide coverage for the stay-at-home spouse equal to the working spouse’s coverage up to $1,000,000. If you have children, it makes sense to purchase the same amount of insurance for both spouses. This way the surviving spouse could choose to stay at home and take care of the children and housework without having to worry about income. If you don’t have children, you may not need to purchase quite as much insurance for the stay-at-home spouse – but you’ll have to decide how much you would need if the stay-at-home spouse dies.
I don’t agree with the calculations that say a stay-at-home spouse is worth $120,000 or more per year. As I mentioned before, the working spouse could choose to stay at home or work less after his spouse’s death. Yes, it would take adjusting to a new situation and learning new skills, but good luck finding a life insurance company that will give you a $2,400,000 policy on a stay-at-home mom or dad.
Don’t Forget Your Stay-at-Home Spouse in Your Insurance Planning
When you’re determining how much insurance you need, don’t forget to consider insurance coverage for your stay-at-home spouse. There’s true value to all the work a stay-at-home spouse does every day, and trying to juggle a full-time job plus all the extra work your spouse did will amplify the stress of dealing with your spouse’s death. Don’t neglect the importance of life insurance coverage on your spouse even if they don’t get paid for all the work they do.
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