Does A Stay At Home Mom Need Life Insurance?

You may think that a stay at home mom or dad doesn't need life insurance. Many people believe that life insurance is mainly to replace the primary earner's income, benefits and potential future pension which seems to make sense to most. It's obvious that the one income family needs life insurance coverage equal to many years of lost income in case the primary wage earner were to pass away.

What is a stay at home parent's work worth?

Just think for a second about how much work a stay at home parent really does during the day. Now, imagine how much it would cost to replace every facet of his or her responsibilities by paying someone else to do everything that is involved with full time parenting during the day. A stay at home parent essentially does the following work:

These are just the main responsibilities of a stay at home parent. Salary.com has an ongoing calculator that actually shows you how much a stay at home mom's services are worth if they actually needed to be replaced by other full time helpers. Their Mom Salary Wizard is updated every year and gives a range of values depending upon the number of children and the local costs.

The US average for 2011 for a stay at home parent with two pre-school children is $115,431 per year! This is based on a very large study of over 6,500 mom's from around the country who reported detailed hours spent on every type of function each day over a period of time.

Imagine if the family were to lose the primary stay at home care giver and how much it would cost the remaining parent in time and money to replace her. Nobody likes to think about this happening , but it should be considered as part of your family's financial planning.

How much life insurance coverage does a stay at home parent need?

A good idea for how much life insurance coverage you would need would be to estimate the cost of a full time caregiver per year, depending upon how many children are in the family, times the number of years until they all reach school age. Reduce the cost by half and multiply this cost by the number of years until they are at least all in their mid teens.

An example would be for a family with two young children 3 and 1 years old. Let's estimate the cost of a full time caregiver at approximately $40,000 per year. Your youngest child has 5 years remaining until he or she goes to school full time. This totals $200,000 until they are school age. Now, add any part time help needed between the time they get home from school until you get home from work at half the full time cost times 8 (the number of years remaining until the youngest is in high school. This adds another $160,000 in cost.

Based on this example, a stay at home parent with two young children should probably have at least $360,000 in life insurance coverage. This will depend upon many factors , but it's a good rough estimate. You should get advice from a financial planner and/or insurance professional before making any decisions.

Where can I find the best life insurance policy for a stay at home parent?

If you are a stay at home parent and would like to compare policies and rates from several highly rated insurers, then we recommend Insureme who allows you to compare several policies from major highly rated insurers such as Guardian, Met Life, Allstate, AIG, and more. They have been a trusted source for life insurance quotes since 1993. They also have a benefit that many other quote sites don't have in that they also include independent insurance agent quotes as well.

This should not be considered financial advice which can only be given by a qualified financial professional. We suggest you consult with a qualified financial planner and/or insurance professional who is most qualified to consult with you regarding policy decisions. Many factors are involved in your policy premium and approval; some of which may not be mentioned in this article. We are an affiliate of the Bankrate Insurance Network.

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