As an experienced national life insurance broker, I see the same questions quite often. One I see repeatedly is with young families shopping for life insurance. Do we need to cover my wife? Why does a stay at home mom need life insurance? Or in gender fairness, why does a stay at home dad need life insurance? Isn’t life insurance just to cover the wage earner? The answer is “yes” and “no”.

I’ll tell you why a stay at home mom needs life insurance, she is very expensive to replace. See most consumers feel if the primary bread winner of the family has life insurance coverage everything is good financially as if no one else could ever die. The stay at home mom or dad as the case maybe, may not being earning income, but they are saving a fortune for the family. Most of us bread winners have a tendency to take our domesticated engineered spouse for granted. I have seen the job first hand with my wife of a quarter century raising three children and I never wanted the job. It is one of the most rewarding but toughest jobs on the market. Think about life without your spouse. Who cares for the children while you work? Who cleans the house? Who cooks the meals? Who runs all of those errands? Let’s look at replacing a stay at home spouse.

Here are some average costs (based on national averages) for help to replace some of the things a stay at home parent does:

Cost for a live in nanny $32,500 per year or

 Day Care up to $11,000 per child per year

 Housekeeping Service weekly $9,350 per year

  Errand Service  4 hours per week $5,400 per week

So conservatively, the average household will spend around $40,000 per year with the loss of a stay at home parent to keep the household running. Now using the same rule of thumb that we use to purchase life insurance on the primary wage earner which is ten times income, the average family will need $400,000 in life insurance to cover these expenses in case of an untimely death. The concept is to invest the lump sum benefit and draw $40,000 per year to recover the new costs to the family. Depending on the age of the children, I would recommend a $400,000 term life for either 20-25-30 years to cover this financial deficit. For example, a healthy 29 year old stay at home mom of two children ages 3 and 5 years old can purchase $400,000 of 20 year term life insurance for approximately $16.00 per month. This equates to a nice lunch out alone once per month. It is just too affordable not to cover this risk for about $.50 cents per day.

We recommend using an experienced independent life insurance broker to shop the market for the best product at the best price for your unique situation.

“It’s the best job in the world, and the toughest job in the world all at the same time.”—Angela Kinsey

Image by Boians Cho Joo Young at www.freedigitalphotos.net

yourfriend4life.com

Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 27 years of experience in sales and marketing in the insurance and beverage industries.