Does a Stay at Home Spouse Need Life Insurance

One of the most common reasons why people purchase life insurance is to provide financially for dependents after their passing. It is easy to assume that a stay-at-home spouse does not need life insurance coverage because he or she does not generate income for the family. However, in many instances, this is not actually true. When you ask does a stay at home spouse need life insurance, you may see that there are many reasons why the stay-at-home spouse in your home should be covered by a great life insurance plan.

Do You Need Life Insurance If You Don't Go To Work?

It is easy to attribute the concept of providing financially for the family to generating income, but there are other financial contributions that someone can make to the household. A stay-at-home parent, for example, may provide childcare for the couple’s children. If the parent passed away, the surviving spouse may need to pay for professional childcare services. The stay-at-home spouse may also provide accounting or financial services, cleaning service, lawncare service and more. It is not reasonable to expect a working spouse who spends many long hours outside the home each week to complete all of these tasks if a spouse passes away.

There are other reasons why buying life insurance for a parent that stays at home is a wise decision. For example, life insurance proceeds may pay for funeral costs and medical care that he or she received at the end of life. Without adequate coverage, the family could experience substantial financial hardship. Perhaps the stay-at-home parent intends to return to work when the children are older in order to contribute to the children’s college expenses or to retirement savings. The family’s plans may be financially impacted in significant ways if this spouse passes away. It is especially beneficial to get coverage early, which makes life insurance for newly married couples especially important.

A Closer Look at Common Policy Types

Before you decide to purchase life insurance for yourself or for any members of your family, you need to understand what types of coverage are available. Some of the more common coverage options include:

Burial Expense Coverage This policy type usually has a relatively low coverage limit on it, such as $25,000 or $30,000 depending on the insurer. In some cases, this policy’s term may extend to the end of life regardless of the insured’s age.
Term Life Insurance This coverage often has a term length that ranges between 10 and 30 years, and the term length may be determined by you when you set up the policy. The death benefits may be much higher than what is available with a burial expense policy, and term life insurance is cheaper than you think. This type of coverage is commonly used to supplement a family’s lifestyle or for other significant purposes.
Permanent Life Insurance Because term life insurance benefits will expire at the end of the pre-determined term, it is not the right coverage for everyone. If you are interested in coverage that remains in place throughout your lifetime, a permanent life insurance policy may be suitable. Both whole and universal life fall under this umbrella. These types of plans also have a cash accrual component, and this cash may be borrowed against or cashed out at a later date. Common uses of it include making investments, paying for retirement, paying college expenses and more. Because of its unique features, it usually has a more expensive premium than term life insurance.
Does a Stay at Home Spouse Need Life Insurance

Determining Which Coverage Is Right for Your Needs

While these are the more common types of life insurance policies available, there are other options as well. Before you determine which coverage type and what amount of death benefits are suitable for you, explore the answers to these questions:

  • Does your family have enough cash on-hand to pay for significant medical bills and burial expenses if you pass away?
  • How will your family’s budget be impacted if you pass away?
  • What are your future plans to contribute financially to the family in various ways?
  • Do you anticipate the need for coverage diminishing in the future, or does the need remain the same or increase?
  • What premium amount can your personal budget comfortably accommodate?

When you ask does a stay at home spouse need life insurance, you can see that the answer to this is affirmative in many situations. Each family dynamic is unique, and financial considerations are equally unique. By asking yourself these important questions, you may be able to determine if you need coverage, what type of coverage is needed and how much your death benefits ideally will be.

Remember to compare quotes from various providers and to review the terms and conditions carefully so that you make a smart buying decision. The easiest and fastest way to make sure you are getting the policy that you need and also have shopped around for the best prices, you should talk to a life insurance broker or agent today.