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Do I need to get life insurance on my spouse even if they don’t work outside the home?

Just because an adult family member isn’t working outside the home doesn’t mean they should skip life insurance coverage.

Q: My spouse and I have decided that one of us will take a few years off of full-time employment when we have children. We know that the working spouse definitely needs life insurance. But as for getting life insurance on your spouse who doesn’t work: Is it worth it?

A: 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 mom or dad 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.

Q: What would those hardships include?

A: 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. Consider childcare alone: The average cost for a nanny in 2018 was $580 per week — around $30,000 over the course of a year. Multiply that expense over several years and it’s clear why stay-at-home spouses need their own coverage.

Q: So how do I figure out how much life insurance my spouse needs?

A: 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 how much life insurance protection is right for the stay-at-home spouse in your family. Your coverage amount will be influenced by factors such as the number of children in your family, the age of your children, the cost of living in your geographic area, the salary of the breadwinner, final expenses and how long you want life insurance coverage to continue. 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.

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