With the arrival of our second child, my wife and I have revisited how much life insurance we need.

Then we had our third son, and she quit her job, so now we’re trying to determine the amount that we need on her to make us comfortable.

We’re very fortunate in the sense that her parents live close to us and are willing to watch our kids when we need them.  (Thank you Papa and Gigi!)

Any parent can easily recognize what a great economic benefit that is, in addition to an emotional benefit.

life insurance for stay at home moms

Some parents either need to stay at home to raise their children or they choose to.

For those that do decide to be a stay at home parent, that doesn’t mean that life insurance is not needed for them.

Stay at home parents are often multi-taskers who cook, clean, do the laundry, pay the bills, go grocery shopping and more yet they are traditionally undervalued. My wife even helps with my blog and edits my videos!  :)

Imagine how much money a stay at home parent would make if they were paid for their work.

According to a recent study by Salary.com, the average stay at home mother in the United States works 96.6 hours each week for 2011, on average, this is an annual compensation of $115,432.  You can argue if this amount is really in the ballpark.  Even half that amount would have a significant impact on many households.

Stay at Home Mom’s Salary

Replacing the contributions of a stay at home parent would be very expensive, especially considering the number of years it takes to raise a family. If we take the $115,432 average annual compensation over 20 years, the economic benefit provided would be $2.3 million. As you can see, this is why it makes sense to consider life insurance for the stay at home spouse.

Life insurance can greatly benefit a family going through the very difficult period of adjustment after the loss of a parent and beyond.

When calculating how much life insurance coverage a family should purchase for a stay at home spouse, look at how much it would cost to pay others to perform functions currently handled by them.  We also took into account paying off the home mortgage to free up that monthly cash flow that could go toward taking care of our kids.

When I think about some of the services that my wife performs they include being a nanny, a chauffeur, cook, house keeper, tutor, nurse, and bookkeeper.

In addition to having to pay for help in these areas, a family that has lost a parent may also have an increase in other expenses.  I know if my wife were not here, I would be destined to eat out more and buy more expensive convenient foods.  That’s not including the laundry and cleaning the house.

I, like most other men, would be hurting.

It’s likely that most couples haven’t thought through the potential repercussions of not covering the stay at home parent with life insurance. But, as you can see, taking life insurance out for the spouse that works at home is equally as important as taking out insurance on the main bread winner.

How Much Life Insurance Do You Need

The amount needed for a stay at home mom will depend greatly on your geographic location, number of children you currently have and expect to have, the breadwinner’s salary and job security, and the overall health of that parent.  For many of the families I have worked with the decision usually revolves around how much debt they currently have (including the house) and college expenses.  So if you have $250,000 left on your mortgage and three kids, a life insurance policy of at least $500,000 is probably in order.

As a reference, you can check out a recent post I wrote that discusses how much life insurance you need to buy.  As stated in that post, be sure to get several quotes from different carriers and be sure to stick to term life insurance.

Losing a Loved One

We need to realize that losing a parent is difficult enough and adding financial hardships to the mix can make it much more painful. Life insurance coverage can help insure that the surviving parent would not be forced to work long hours or to take a second job to pay the bills.

But instead, put more focus on managing the household and caring for the children during a critical time in their life. By assessing your specific requirements and preparing accordingly, you can help yourself make the proper life insurance decision so that the rest — so they can rest easy knowing that family financial needs be met well into the future.


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Comments | 3 Responses

  1. says

    Figuring a stay at home mom salary is soooo crucial. I think too often most families overlook the financial piece of stay-at-home moms. Unfortunately, it’s not a job that pays, but it doesn’t mean there shouldn’t be life insurance. There’s an incredible amount of value moms bring to the family.

  2. tian says

    well done! my problems are gone My woman came back last night, i thought it’s a joke she came to say good bye to me ,then i waited ,suddenly i saw preparing food,bed and hide under branket, i couldn’t believe any thing i see, i decide to sleep at the gouge to see what happens next ,only see her come and slow her self on me start kissing and then i realize you are the true healer, its now 2 weeks since she came home ,but doc my sex life has gone down i don’t know why , i want to come and order for that medicine. i will phone you later today! i appreciate your services, be there for us please. thanks you to ayokospellcaster@gmail.com


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