These parents ably care for children, cook, clean, chauffeur, shop, pay bills and perform many other tasks, all services that would need to be replaced in the event of a death . And there are many different types of life insurance, so weigh your options to help protect your family.
Major financial contribution
Just how much is the contribution of a stay-at-home parent worth? More than you might imagine. According to a survey by Salary.com Opens in new window, the average stay-at-home mom works 96 hours a week. If she charged for each of the jobs she did, this mom would earn an annual salary of $162,600.
As previously noted, it’s not just childcare — the cost of which is staggering in and of itself — that stay-at-home parents provide. Among the highest-value jobs they perform are acting as psychologist, facilities manager, staff nurse and chief executive officer of the home.
How much life insurance?
Financial professionals recommend a life insurance policy that’s 10 to 20 times an annual salary. However, when you’re not bringing home a paycheck, it can be hard to calculate the right amount. Most life insurance companies will allow a stay-at-home parent to purchase a policy that’s equal to what’s carried by the family’s breadwinner.
At the very least, your insurance should be sufficient to allow the surviving spouse to maintain the household while managing work.
Consider the cost of childcare. Full-time care for an infant at an accredited center can run as high as $20,000 per year, according to the analysis by Care.com Opens in new window. But even older children may require after-school care or activities during school breaks.
A spouse who works long hours and travels a lot needs even more assistance.
Families suffering the loss of one parent may incur other expenses, too. For example, the working spouse may need to take some time off to help children work through their grief. Or the duties of single parenthood may be so overwhelming that pricey takeout meals become a regular part of the family budget — something that may not have occurred when there were two parents in the house.
A silver lining: The vast majority of stay-at-home parents Opens in new window are women, and women typically pay less for their life insurance policies, given their longer life spans.