Do stay-at-home parents need life insurance?

Stay-at-home moms and dads do amazing work for their families, and if you or your partner is a stay-at-home parent, then you understand just how important that job is. A recent Salary.com study (Opens in a new tab) estimates that the services provided by a stay-at-home parent would cost $184,820 annually if the position was paid. Many people assume that because this role is unpaid, it’s not necessary for a stay-at-home parent to have life insurance. But when you consider the value of their work at home, life insurance makes a lot of sense for a stay-at-home parent.

What’s the value of a stay-at-home parent?

From boosting your children’s grades to saving on childcare costs, there are many impacts of a stay-at-home parent’s work. That’s why it’s important to consider the monetary value of their contribution when deciding if you need life insurance.

To determine the monetary value of a stay-at-home parent’s contribution, you’ll want to assign a value to their services. Without your partner at home, how much would childcare cost? Per child? How much time would you need to spend preparing meals, running errands or doing chores like laundry and dishwashing? Add in all the nights and weekends parents put in, and you’ve got some serious overtime.

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

Many insurance experts suggest having between five and ten times your annual income as your coverage amount. Consider things like how much you have left on your mortgage or how old your kids are. If you have a lot of debt or your kids are relatively young, a higher coverage amount might make sense to protect your family financially if you were to pass away. You’ll also want to consider your family’s lifestyle. Include in your calculations how much you’ll need to help maintain the quality of life your family has.

For a stay-at-home mom or dad, however, the cost of a $1 million policy might be a bit steep. So, if that doesn’t fit into your budget right now, that’s okay. Even a $10,000 policy may help protect your family’s financial future.

What type of life insurance should a stay-at-home parent get?

While there are several different kinds of life insurance, the two most commonly chosen types are term life insurance and whole life insurance.

Term life insurance is usually the least expensive option and can last long enough for your kids to get through college and then some. Term policies are temporary, they end after a set amount of time, however, so if you want coverage beyond that, or the ability to build cash value, a whole life insurance policy might be right for you.

Whole life insurance can be more expensive, but it may provide permanent protection and offer a few more benefits than term life. This type of policy may build cash value and give you the ability to take a loan against your policy.*

Policies tend to be less expensive the younger and healthier you are, so the sooner you get life insurance, the better.

Get a life insurance quote

Ready to start shopping for life insurance for the stay-at-home parent in your family? Connect with an American Family Insurance agent to get started today. They’ll answer any questions you have about life insurance and help you find the right coverage to financially protect your loved ones.

This article is for informational purposes only and based on information that is widely available. This article does not afford, offer, or guarantee any coverage. We do not make any guarantees or promise any results based on this information. We are not responsible for the content of any third-party sites that may be linked in this article.

Neither American Family Life Insurance Company nor its agents are authorized to give legal or estate planning advice, and this article should not be construed as such advice. Customers should consult an attorney or estate planner for answers to legal and estate planning questions.

This is a brief description of coverage and is subject to policy and/or rider terms and conditions, which may vary by state. Fixed and guaranteed premiums are statements about the policy as determined at issue, and any changes made to a policy may affect the premium and are subject to our underwriting rules. The words lifetime, lifelong and permanent are subject to policy terms and conditions.

*Any loans taken from your life insurance policy will accrue interest. Any outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or from the cash value at the time of surrender. If the loan balance grows too large for the cash value to support it, the policy could terminate.