By Keith Reed
When married couples have young children, often one spouse stays home while the other works outside the home. While most parents understand the necessity of purchasing a life insurance policy on the income earner, few realize the importance of also insuring the stay-at-home spouse.
Being Prepared for the Unexpected
What if the stay-at-home spouse suddenly died? The family would be devastated. Friends and family members would initially pitch in to help. But eventually they would return to their regular lives. Before the surviving spouse returned to work, a caretaker for the children and home would need to be hired, presenting a potential financial hardship. Had life insurance been purchased on the stay-at-home parent, however, the family's needs would have been protected.
Measuring the Value of the Stay-at-Home Spouse
Despite the importance of the stay-at-home parent, there's little research to quantify its value. In its 10th
annual Mom Salary Survey, Salary.com reported the most popular functions performed by mothers equate to $117,856 per year
in salary. It further states the stay-at-home spouse works a 99-hour week, serving as housekeeper, teacher, cook, psychologist and van driver — in short, functioning as a CEO at home.
Flexible, Customizable Choices
The type of policy you select depends on your needs and budget. Term life insurance provides affordable coverage for several years. In contrast permanent life insurance provides protection for your entire life (provided premiums are paid) and accumulates cash value tax-deferred. This cash value can be accessed (loans accrue interest and reduce policy's cash value and death benefit). Plus, riders, available with term and permanent life insurance, enable you to customize your policy to meet and grow with your changing needs.
The loss of a parent is an emotional hardship for a family; purchasing insurance coverage for a stay-at-home spouse can help ensure that it doesn't become a financial hardship as well.
Salary.com, "Mom Salary Survey," May 5, 2010.
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