In just under half of all married couples, both partners work outside of the home. Generally, both partners don't work for fun. They both work because the extra income allows their families to pay off their debts, maintain their standard of living, and provide a quality life for themselves and their children.
Ask yourself, what would you do if your spouse suddenly were no longer in the picture?
The death of a spouse is certainly a traumatic event. This catastrophe can be even more difficult if the income provided by the deceased spouse was critical to the family's financial plan and the security of the family unit. Increased expenses and lower family income are only part of the changes a family will be faced with after the traumatic experience of losing a loved one.
Even if your family has one main breadwinner and the remaining spouse works from the home, you still need to think about planning for the loss of both the higher income worker and the "stay-at-home" spouse. Planning can be critical to the survival of the family.
Obviously, the breadwinner will need to have protection on his/her life so that the family does not face the financial devastation that could occur due to the immediate loss of income. But many people don't realize how important the financial contributions of the "stay-at-home" spouse really are. Just think about how much you rely on your spouse to take care of things when you are not around.
If you are asking the question: "does my spouse need life insurance," the answer is probably "yes"!
Although no loss of earned income may result, the family could face the financial challenge of paying higher expenses for things such as child care, dealing with transportation issues, household maintenance and other miscellaneous family responsibilities that the at home spouse has always provided. For our military Members, the challenge is even greater. If you deploy (and especially with short notice), who will care for your children 24/7? Is your family available to help and if so, how long can they offer assistance before they have to return to their own lives?
Couples often assume that "stay-at-home" parents do not need life insurance since they are not providing a weekly stream of income. Loss of income, however, is only one of the financial burdens a family would face if a "stay-at-home" parent died. Someone else would still have to take care of all the tasks that person handled. Someone else would still have to take care of all the tasks that person handled.
"All those services have a price and could be a significant expense for a family to replace," says Steven Brostoff, a spokesperson for the American Council of Life Insurers. Childcare alone can run more than $30,000 a year. A family would need roughly $1 million in investments to produce that kind of income. That's why life insurance is so important for BOTH partners.
Insure.com, an online insurance broker, took an informal snapshot of the various tasks a "stay-at-home" parent performs and added up how much a family would have to spend to pay professionals to do the same thing. Bottom line: families could expect to spend $61,436 a year.
That's just for the routine tasks and does not include any income a primary caregiver/parent might provide from either full or part-time employment.
Sample tasks: Task Annual Cost Cooking $6,938 Driving $6,285 Tutoring $7,140 Shopping $1,580 Housekeeping $4,888
Regardless of whether one or both spouses are working, in the event of an untimely death, the surviving spouse will be faced with greater financial responsibilities. Do your whole family a favor and take a few moments to find out how much protection is needed to insure both partners and find a life insurance plan that works with your budget.