The main point of life insurance is to replace your income in order to provide for your family when you pass away.

But if you’re a stay-at-home parent not earning a paycheck, you probably don’t think you should take out your own life insurance policy.

But as you know, what you do at home is valuable. And it won’t be easy or even financially feasible for the working parent to do what you do and still hold a job outside the home if you pass away.

This is when life insurance can step in.

24/7 Wall St. Insights

• Life insurance can help cover the costs of looking after a child after a stay-at-home parent passes away.
• The average cost of a nanny after the loss of a stay-at-home parent is $35,000 a year.

Should stay-at-home parents get life insurance?

There are many reasons why you should get life insurance if you’re a stay-at-home parent.

Even if you’re not earning an income as a stay-at-home parent, you are providing crucial services to your family. And while the love of a parent is priceless and irreplaceable, the services stay-at-home parents provide can carry hefty price tags.

After the loss of a stay-at-home parent, the working parent can expect to pay $11,250 a year for a Day Care Center or $35,000 a year for a nanny. And these costs are per child.

Of course, these are estimates. Consider the roles the typical stay-at-home parent plays.

• Teacher
• Chef
• Housekeeper
• Laundry worker
• Chauffeur
• Coach

How much should a stay-at-home parent take out in life insurance?

The amount of life insurance you need as a stay-at-home parent varies depending on factors like family size, scope of services you provide, and whether you expect to go back to work at some point.

But the general rule of thumb is to take out a 15-to 20-year policy of at least $250,000 to $400,000, according to finance expert Dave Ramsey.

And if you expect to return to work, you may want to eventually buy a policy that’s 10 to 12 times your expected income. This could provide a safety net whether you return to work or remain a stay-at-home parent.

When should you get life insurance?

It’s generally best to take out a life insurance policy when you’re young and healthy. That’s because over time, you’re likely to be at a higher risk of developing potentially life-threatening conditions. As a result, actuaries could deem you a higher risk and set high premiums for you.

But if you do it early on in life and are healthy, you can expect to pay smaller premiums and still provide for your loved ones. The average term life insurance premium for a healthy 30-year-old is about $170 per year, according to the Life Insurance Marketing and Research Association (LIMRA).

The bottom line

Even if you’re not earning a paycheck as a stay-at-home parent, your services are essential and valuable. Should you pass away, it could mean the surviving parent faces a highly stressful and financially burdensome time taking over your tasks.

And although you’d never be replaced, life insurance can at least help the surviving parent financially cover caring for your child and maintaining your home.

A Quote in Minutes

Even if you’re in a similar financial position and unsure about the exact amount of coverage needed, it’s always wise to get a quote and explore your options.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. With affordable rates and customizable policies, life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to visit our website and learn how to get a quote in just a few minutes.

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