Parent. Its official definition actually should be, “Caretaker of child. Synonyms: nanny, tutor, coach, nurse, therapist, chef . . . ” And the list goes on and on for pages.
This definition especially applies to a stay-at-home parent (SAHP).
While SAHPs may not pull down a seven-figure income from an office, they do however provide A LOT of valuable services for the family that cannot be easily replaceable.
The whole point of life insurance is to replace your income so your family can function if something were to happen to you or your partner/spouse.
That makes sense for the spouse who goes to the office every day, but what does that mean for the stay-at-home parent?
Why do SAHPs even need term life insurance if they don’t technically make an income?
Because of the services they provide. Here are some of the jobs a stay-at-home parent covers:
- Laundry services/Dry Cleaning
- Tutor (ALL subjects)
If something horrible were to happen to the SAHP, who would take care of all these needs? The surviving spouse can’t quit work—they still need to bring home an income. That’s where term life insurance kicks in.
We know there’s no way to ever replace a parent. Nothing will ever fill that hole. But with the money from a life insurance payout, the surviving spouse can hire someone to cover many of the responsibilities the SAHP used to cover.
The big question is how much term life insurance you should purchase for the stay-at-home parent. There’s no one-size-fits-all answer to this because every family is different.
You need to think through what you’ll do in three major areas: childcare, education and household duties. Those decisions might mean you get a bigger policy to cover the extra costs.
Childcare: How much money would you need to cover childcare expenses, that the SAHP did free of charge? According to the childcare website Care.com, childcare for an infant (0-3 years old) costs about $200 a week (average) for a day care center and $600 a week for a private nanny.
So 50 weeks of care could run between $10,000 and $30,000 on average, it may be more in some states. And that’s just for ONE child, now multiply that by however many children are currently in your home.
Education is a second big one to look at as well. A lot of families choose to homeschool their children for personal reasons. If that’s the case in your family, you and your spouse need to decide where the kids will go to school if something were to happen to the SAHP. If you want to go the private school route, then you’ll need to factor in those costs. The national average for private school tuition is about $10,700.(Again, that’s just for one child.) And that doesn’t include all the extra costs like supplies, fees and extracurriculars.
Household duties: Who will be responsible for cleaning the house, doing laundry, school pick up and drop off, folding laundry, cooking, etc. if something happens to the stay-at-home parent?
If you paid someone to clean and do laundry, that will cost you on average about $26.00 an hour, and cleaning up after a child/children is not just an hours day of work, that expense would also coming out of your pocket.
Stay-at-home parents often devalue the financial role they play in their family. Don’t make that mistake, especially when it comes to life insurance!
Nobody could ever take the place of the stay-at-home parent, but replacing their income is important. If you would like more information on Life insurance for a SAHP
Contact our Life insurance Agent Eddie V. for more information !
(702) 251-4949 or you could reach him via email at firstname.lastname@example.org.
Below is a link if you are interested in getting a fast and painless quote for life insurance.