Gone should be the days of mostly writing life insurance on husbands.
Not only are women much more likely to be the family’s primary caregiver but they are increasingly the primary breadwinner as well.
Let’s try and imagine what the total cost would be to have a babysitter, personal chef, nurse, bookkeeper, counselor, chauffeur, scheduler, cleaning crew, and events planner?
I’m sure I’ve missed many more hats but you get the point.
It’s commonplace for the breadwinner to buy life insurance to protect their income but what about the stay-at-home mom who performs many if not all of the tasks we mentioned above?
The fact of the matter is that moms either don’t have enough or even worse, don’t have life insurance coverage at all.
Why Stay-at-Home Moms Need Life Insurance
Salary.com published a study where they estimated that a stay-at-home mom juggles 94.7 hours of work per week and can be estimated to earn a salary of over $110,000 per year.
I know that if I ever lost my wife I’d be lost and would certainly need some assistance with family duties that our stay-at-home mom was taking care of.
Now that we understand mom needs life insurance as well I know that you’re wondering…
How Much Life Insurance Does a Stay-at-Home Mom Need?
There are many methods to utilize in determining how much life insurance one should purchase for themselves.
The most important thing to remember though is that you should only commit to what fits the family’s budget.
My preferred three methods of determining how much life insurance one needs are as follows:
Method #1: Salary multiple such as 10 times your salary (or whatever multiple you prefer such as 15 or 20 times).
Method #2: Salary multiple + home mortgage balance.
Method #3: Full life insurance needs analysis which takes into account debt, salaries, assets, investments, mortgage, existing life insurance, etc. to provide you a nearly exact figure as to how much life insurance your family’s financial situation truly merits.
Luckily there are handy calculators you can use to make the calculations for you.
Again, most important is that you make sure you purchase what fits the family’s need and budget.
Speaking of life insurance and budgeting, purchasing life insurance on mom is oftentimes 10% to 20% cheaper than the same policy for a male if not even less expensive than that.
Women are, more often than not, healthier than men because they actually go to the doctor when they feel they need to.
As a result, their life insurance rates are cheaper.
With many stay-at-home moms, you can purchase just a mortgage life insurance policy that pays off the mortgage and frees up that monthly payment to use on taking care of your kids.
Types of Life Insurance for Stay-at-Home Moms
Your options for life insurance are going to be either term or permanent.
Which one you pick depends on your goals and budget.
We’ll dive into each type a little deeper to help you understand which option may be best for you.
Term Life Insurance
Term insurance protection will provide you coverage for the term duration you purchased.
For example, you can buy term life insurance to last for 10, 15 or 20 years (even more).
If you buy a 20 Year term policy the life insurance will expire after 20 years of policy ownership.
Due to term life insurance not generating cash value and being temporary coverage it’s your least expensive life insurance option.
It is especially useful if mom does not get approved for a standard life insurance policy.
In this case, getting term life insurance with no medical exam can still be a very affordable option to take care of your family’s needs.
Permanent Life Insurance
Permanent Life Insurance is a general term used to refer to life insurance policies such as Whole Life Insurance and Universal Life Insurance.
Both whole and universal life insurance are permanent plans (as long as you continue paying the premiums) that also generate cash value.
The cash value accrued in the policy is available to borrow from and use as you see fit.
Due to permanent life insurance generating cash value and of course being, permanent, it’s a much more costly option for the same amount of coverage you can afford with term life insurance.
Shopping for Life Insurance for Stay-at-Home Moms
When shopping for life insurance as the stay-at-home parent of your household the best thing you can do is to work with an independent agent who is licensed and able to provide you quotes from multiple carriers.
The benefit here is that the independent agent will be able to find you the best deal by researching multiple life insurance companies.
In addition, if you have a health condition they are able to shop your situation around to multiple carriers in search for the best deal given your specific situation.
We know that finding the perfect life insurance policy can be a long and complicated process, but it doesn’t have to be
Our experienced agents are here to make the process as quick and simple as possible for you.
There are dozens of different kinds of plans that you can choose from, and we can help walk you through the process to ensure that you’re getting the best plan to meet your needs.