4 Reasons Stay-At-Home Parents Need Life Insurance

stay-at-home moms and dads

Stay-at-home parents may not bring in monetary income, but they provide valuable support to the household. The support from stay-at-home moms and dads would be greatly missed (and need to be replaced) if anything happened to them. 

Everyday Life’s Ultimate Life Insurance Calculator can help stay-at-home parents determine how much life insurance coverage they need. Then, it matches them with a dynamic, personalized plan to fit their unique needs.

Stay-at-home parents can save 50% or more compared to traditional term life plans when they purchase a smart policy from Everyday Life.

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Why Most Stay-at-Home Parents Think They Don’t Need Life Insurance

Thinking about what would happen to their children if anything happened to them is apparently something that most parents — including stay-at-home moms and dads — don’t like to do. More than a third of parents with kids under the age of 18 don’t have life insurance, yet it’s arguably the most important time in life to have a policy. 

While it can be emotional and difficult to plan for the possibility of your family going on without you if the worst should happen, everyone who has someone who depends on them — a spouse, children, elderly parents — needs to have life insurance. A policy can provide for your family’s financial needs when you’re no longer able to, regardless of how much you earn.

Many people think of life insurance’s purpose as simply being to replace the value of their income, which is why stay-at-home moms and dads often don’t have life insurance policies. Really, though, the purpose of life insurance is to replace all of the monetary value you bring to your dependents. If something happens to you, your family should be able to focus on grieving and moving forward without being hindered financially.

4 Reasons Stay-at-Home Moms and Dads Need Life Insurance

Stay-at-home parents don’t bring in a salary, but their role is of a higher monetary value than most couples know. In 2019, Salary.com estimated the value of the work of stay-at-home moms and dads by tracking real-time market prices of all of the different roles they take on throughout the work week — daycare teacher, academic advisor, dietician, housekeeper, interior designer, recreational therapist, groundskeeper, and more. They concluded that the median annual salary for all that stay-at-home moms and dads do as of 2019 is worth $178,201. 

Stay-at-home parents need to have life insurance because what they do is worth that much to their families! Here are four specific reasons that stay-at-home moms and dads should buy life insurance:

1. The Cost of Daycare is Extremely Expensive

Care.com conducted a 2019 Cost of Care survey to figure out how much parents pay for childcare. They found that the average weekly cost for a child care center for one child was $215, that the average weekly cost for after-school care was $243, and that the average weekly cost for a nanny was $565, which can all add up to between $11,180 to $29,380 annually.

Another study conducted by Child Care Aware found that average annual cost to be slightly lower, at between $9,200 and $9,600, but still estimates that married couples spend about 10% of their income on child care while single parents spend about 34%. Those are major percentages. 

If you’re a stay-at-home parent with young children, you are the daycare and after-school care and nanny, so you don’t have to pay these costs. However, if something happens to you, your spouse will be forced to pay for the rising costs of childcare unless you have a life insurance policy that can pay this expense for all of your children. 

2. The Costs of Education Have to be Accounted For

If you’re a stay-at-home parent who homeschools your children, losing you means losing a teacher. It forces your spouse to make a decision about how to educate the kids. If you both would prefer to get them a private tutor or send them to private schools, you need to consider the costs of tuition. Data from Private School Review estimates the average cost of private school tuition to be $11,686 per year in 2021. 

Even if you are a stay-at-home parent whose children will likely go to public schools, you need to consider the costs. If you don’t want your kids to take the bus, there’s the cost of transportation to and from school. Then, there’s the cost of college tuition, if that is something that you plan on helping your children with. College Board’s Trends In Higher Education series revealed that a four-year student entering a public, in-state college in 2020-2021 will pay an average of $10,560 annually for tuition. That’s not taking into account the costs of books, food, room and board, and cost of living.

Having a life insurance policy could give your child the quality education that you want them to have. 

3. Household Duties Keep a Household Running Smoothly

Cleaning, cooking, grocery shopping, laundry — these are all things that a stay-at-home mom or stay-at-home dad may do regularly. And it’s something else you should keep in mind when considering whether or not to get a life insurance policy.

If you do the majority of the household chores, you play a valuable role in helping the house function. If you were gone, someone would likely need to be hired to do those tasks in order for your spouse to continue working and support the family with their income. A full-time housekeeper, according to Home Advisor, can cost anywhere from $25,000 to $60,000 annually. You need a policy that takes the costs of chores into account! 

4. Funerals and End-of-Life Expenses are Costly

If you die unexpectedly, your family will have to pay for all of the costs associated with your death. Yet, most people don’t think about this until it’s too late. Expenses can include the cost of a funeral, burial or cremation, medical expenses incurred due to your death, and more.

In 2019, the National Funeral Directors Association reported an average funeral cost of $7,640. In some areas in the U.S., it’s much higher. Your family literally may be unable to pay those costs without help from a life insurance policy (or risk going into steep debt). 

Be Careful About the Life Insurance You Buy as a Stay-at-Home Parent

Hopefully, this guide has helped to make the need for stay-at-home moms and dads to get life insurance clear. However, in the case where one spouse works and the other doesn’t bring in a tangible income, couples need to be thrifty when it comes to the type of life insurance they should buy — that’s why most financial experts recommend term life, as term life is generally more affordable.

The average salary of a stay-at-home parent could be $178,201, but every family is different. Where you live, how many kids you have, and what would need to be replaced if you passed away all influence how much coverage you should purchase and how much you should pay for it. Most couples in this situation need to be smart with their money, which is why Everyday Life makes getting the right amount of life insurance affordable and easy for stay-at-home moms and dads.

Get the Right Amount of Life Insurance

By using our online Ultimate Life Insurance Calculator, stay-at-home parents can enter specific information about their lives and families (but no contact information, so they don’t have to worry they’ll be bothered by pushy salespeople) and get a personalized recommendation for an amount of coverage that would adequately protect their dependents if anything happened to them.

The great thing about our coverage is that it automatically steps down over time to reflect the life changes that stay-at-home moms and dads experience and help them avoid overpaying for insurance they don’t really need. 

For example, say that Shawna is a stay-at-home mom with three little kids, all under the age of 5. Her husband has a job he loves, but with three kids, their budget is always a little tight. Next year, one of her children will start kindergarten at a public school, and the other two will follow shortly after. Shawna plans on staying home during their first few years of elementary school, but by the time the youngest is in 3rd grade, she wants to go back to work.

At this point in her life, Shawna needs a lot of life insurance coverage — enough to value the costs of the childcare she provides for all three children, the chores she does during the day, and more. However, in a few years when the kids are in school and she’s working, she won’t need as much coverage, and when they’ve graduated, she’ll need even less. So it doesn’t make sense for her to keep paying the same premium for the same bulk amount of coverage year after year. 

If Shawna purchases a policy with Everyday Life, her coverage would phase down over time, and so would her premiums. She wouldn’t waste money on unnecessary coverage, and she and her husband could use that money for other things and experiences. Having a dynamic plan could save her thousands of dollars compared to a traditional term life policy! 

Everyday Life’s process for getting a personalized recommendation only takes stay-at-home parents a few minutes. Get yours today!

Disclaimer: The comments, opinions, and analyses expressed at Everyday Life are for informational purposes only and should not be considered individual investment, legal or tax advice.

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