A dad working at a kitchen table while kids eat and the mom is in the background.

Do stay at home moms & dads need life insurance?

Even when an adult family member doesn’t work outside the home, life insurance is still worth considering.

One of the reasons for people to buy life insurance is to offer financial security for their loved ones in the case they pass. People want to make sure their family’s financial obligations are not a burden, and life insurance is one of the ways to provide that financial stability for a family in the unfortunate case that a parent dies. When one of the parents stays home to care for their children, this question may come up. The spouse that stays home may not generate an income, so is it worthwhile for the stay at home mom or dad to have life insurance?

In a word, yes. Here's why. Generally, when people start to think about how much life insurance they need, they use an income-based rule of thumb, such as multiplying their annual income by 10. That often means they don't think a stay at home dad or mom needs life insurance because there's no income to replace. However, that assumption is a common misunderstanding about the goal of life insurance. Life insurance is not meant just to replace lost income, it protects your family against financial hardship.

Value of a stay at home parent

Many stay at home spouses take the lead in caring for young children, cooking meals, cleaning the house and running errands, among other tasks. If these caregivers were suddenly gone, their working spouses would likely need time to grieve and to help their children deal with the loss of a parent. In addition, they may eventually need to hire someone else to do many of the tasks the non-working spouse was in charge of, creating a significant financial burden. According to Care.com, the average weekly rate for child care with a nanny in 2021 was $694 for one child and $715 for 2 children. Consider that weekly expense over several years and it’s clear why stay-at-home spouses need their own coverage.

In addition, other tasks that a stay at home parent does are: shop for groceries, do laundry, pay bills and check budgets, drive kids to activities, event planning and help with homework. According to salary.com, it is estimated that the work of a stay at home spouse in 2020/2021 was similar to earning a salary of $184k a year. In short, a stay at home spouse has a lot of responsibilities and if suddenly the family loses a stay at home parent, all of these jobs would need to be done by someone else.

How much life insurance is needed for a stay at home parent?

Determining life insurance needs even for someone with an income is an inexact science, and that really rings true for a non-earning spouse. There are several important factors to consider when thinking about life insurance for the stay at home parents. Your coverage amount will be influenced by factors like:

  • Number of kids in your family – Child care costs will be proportional to the number of kids you have. 
  • Life style – Whether you live in a big city or in the country, have a small or a big house, you are planning to send your kids to private school or do extracurricular activities, you may account for things that you want your family to keep having in that case life insurance is needed.
  • Work in the future – If you are home for now caring for your kids but are planning to go back to work in the future, this should be taken into consideration when calculating the amount of life insurance needed.
  • Legacy for your family – Maybe you want to consider leaving an inheritance for your children when they are older, or help them with college costs.
  • Final expenses – Life insurance can definitely help alleviate the burden of paying for a funeral and all related expenses. 

By talking through these topics with a State Farm® agent you will gain valuable insight and information to help you determine the coverage amount that’s right for you. Whether it is term or whole life insurance, having life insurance protection can help the family when times are most difficult. Also use our Calculate My Life tool to help you decide how much life insurance you need.

You can get a life insurance quote now, or give us a few details and a State Farm® agent will reach out to you.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

State Farm Life Insurance Company (Not licensed in MA, NY or WI)
State Farm Life and Accident Assurance Company (Licensed in NY and WI)
Bloomington, IL

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