Being a stay-at-home parent is undeniably one of the toughest jobs on earth.

Apart from taking care of every step of your tiny tot day in and day out, you make sure the bills get paid, the laundry is done, the grocery is taken care of, dinner is on time, the house stays in order and accommodable .. the list goes on and on.

In spite of all these, when it comes to purchasing life insurance, these stay-at-home parents are often overlooked. Most of the time, the primary breadwinner of the family is given privilege over the stay-at-home parent. After all, they are the ones who bring home a salary on a day-to-day basis, right?

Well, according to a US census data studied by the Huffington Post, there are about 12 million stay-at-home parents in America. That’s 12 million individuals offering services to their family out of sheer love – a service that’s both irreplaceable, and hard to measure.

Have you ever thought how much would it cost if you had to replace the one taking care of everything at home while you are out? According to Salary.com’s calculations, the national average income for all the work that a stay-at-home parent does is about $113,000 if you had to outsource it all. Here we are not including the much-deserved overtime that goes with it.

How would you ensure your family’s financial security if that person is no longer around?

The financial involvements of stay-at-home parents

The cost of childcare in the US is skyrocketing. Besides saving you the amount on childcare, a stay-at-home parent also offers that peace of mind ensuring that the child is in safe hands.

As per the National Association of Child Care Resource & Referral Agencies (NACCRRA) and the 2015 Parents and the High Cost of Child Care report from Child Care Aware of America (CCAoA), the average cost of full-time daycare in the United States is over $11,000 per year or $900 a month. The cost is more for infants who need special care.

What if the stay-at-home parent dies without life insurance? Paying an additional $900 per month out of pocket can be quite a burden. As per the CCAoA estimation, the cost of childcare for dual income couples goes up to somewhere about 15% of the total earnings. For a single parent, it can be more than 24% of the net income.

This is undoubtedly huge (and we’ve only taken childcare into account). It’s nice that in Salary.com there is a calculator where you can you can input various jobs in specified fields and the number of hours spent on each one to find a comparable annual wage that your stay-at-home spouse doesn’t earn.

Why life insurance is necessary

The purpose of life insurance is ensuring you don’t feel the absence of your loved ones when they are no longer around. If a stay-at-home parent’s workload is valued at $100,000 a year or more, it’s a significant financial hit for any family of any financial background.

As per industry experts, it’s better to have coverage that’s five to ten times of your annual income. But does this rule fit for the stay-at-home parents as well?

Yes, but it’s a bit complicated.

Such an insurance is quite unique since you’re not replacing income. Rather, services that he or she once rendered on a daily basis. The insurer might find it difficult to understand your needs because you’d have no figure to enter in the “Enter your income” field.

So though possible, the process will be a bit difficult insuring the stay-at-home parent. Here is what you can expect.

Buying life insurance for a stay-at-home spouse

Buying a life insurance is far easier today that what it used to be in the past. Nowadays, the process is far more transparent, automated, and fast.

However, it requires a little more effort from the insurers part when there is no viable income involved to protect. A number of factors are evaluated in such cases.

If you seek coverage for someone who is technically unemployed, a majority of the insurers will assess your financial situation differently.

  1. If the applicant is not employed outside the home, often the coverage amount of the wage-earning partner is asked. Usually, the stay-at-home spouse is stated eligible for coverage of the same amount or less.
  2. If the working partner doesn’t have any life insurance, the insurer may want to know the reason behind insuring the stay-at-home mom or dad.

So if you apply for a policy, it’s unlikely that you’ll be approved immediately. The insurer may take the time to double-verify your intentions and only then approve.

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