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Why stay-at-home parents need life insurance

There’s a misconception that the only person who needs life insurance is the primary breadwinner of the household. Stay-at-home parents need coverage too.

Being a stay-at-home parent is the toughest job in the world.

Beyond being responsible for every detail of a tiny human’s life, these superheroes play a number of vital roles (usually at once) that make a family truly whole. Day in and day out, the children are cared for, the bills get paid, the house stays in working order, clean clothes are available to wear … the list goes on and on.

There’s a misconception that the only person who needs life insurance is the primary breadwinner of the household. They’re the ones who bring home a salary on a day-to-day basis after all, right?

This couldn’t be further from the truth. 

Have you ever stopped to think just how much would it cost to pay for the services a stay-at-home mom or dad provides? The national average income for all the work a stay-at-home parent accomplishes would equate to more than $162,000 if your family had to outsource it all (and pay the much-deserved overtime that goes with it), according to Salary.com’s calculations.

But being reminded not to take stay-at-home parents for granted is only part of the equation. The other, and arguably more important, part: How to ensure your family is financially protected if that person were no longer around.

The financial contribution of a stay-at-home parent

The cost of child care in America is staggering. While a stay-at-home parent does more than just care for children, it’s the expense that’s easiest to understand its financial impact.

The average annual cost of center-based infant care in the U.S. is $11,959, according to Child Care Aware. This amount accounts for more than 12 percent of the median married-couple family income — well above the Department of Health and Human Services’ (HHS) recommendation that child care should cost no more than 7 percent of household income.

That’s a lot of numbers and percentages to take into account when figuring out the financial contribution of a stay-at-home mom or a stay-at-home dad (and we’ve only touched on child care). Thankfully, sites like Salary.com have created a calculator where you can input the number of hours spent on housework, child care, home maintenance, cooking, driving, and a host of other tasks to find a comparable annual wage for the hours you work at home. It even takes overtime pay into consideration.

Why life insurance might be necessary for a stay-at-home spouse

The purpose of life insurance is to protect the people you love most financially. If a stay-at-home parent passes away, that’s a significant financial hit for any family to take.

A life insurance policy payout can be a safety net that helps your survivors shoulder the financial burden of your death. The payout itself (called a death benefit) is the amount of money the life insurance company would pay your beneficiaries if you died while the policy is in force. Your beneficiaries can use the policy’s death benefit for a number of financial needs – to help cover funeral expenses, meet day-to-day living expenses or plan for the future, to name a few.

Term life insurance is a great option to financially protect your family because the coverage is often very affordable. For example, a 20-year, $500,0000 Haven Term policy, issued by MassMutual, for a 35-year-old woman in excellent health starts at $20.32 per month.

Choosing the right amount of coverage for a stay-at-home parent

At Haven Life, which sells life insurance that’s issued by our parent company MassMutual, a stay-at-home parent is eligible to purchase coverage up to or equal to the amount the working spouse has from any life insurance company. 

Why? In general, life insurance companies have to limit coverage on anyone to a level that makes sense for their financial situation. In the case of a stay-at spouse, it’s not easy to quantify their contribution to the home, but it’s a fair assumption that both partners contribute to the household equally. 

For example, if you are a stay-at-home parent and your partner has a 30-year, $500,000 policy, you qualify for up to that amount in coverage with a Haven Term policy. The important point is that both partners need to have coverage.

So, here’s what you can expect.

Life insurance is more affordable than you think

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Buying life insurance if you’re a stay-at-home spouse

Buying life insurance for your spouse or partner is easier now than ever before because of transparent, no-nonsense online life insurance processes like those at Haven Life.

We have created a dynamic, online experience that will ask you only the questions that are really necessary to determine term life insurance coverage eligibility.

During the online application process, we will ask about your lifestyle, personal health history, family health history and fact check it with third-party vendors like the Medical Information Bureau, DMV, and Social Security Administration to ensure all is accurate. This isn’t any more information than is required by other insurers; we just analyze it in real-time instead of over the course of several weeks.

With this policy, ensure that the salaried spouse is covered first (by any life insurance company) so that you can get the equal or less amount of coverage. Then apply for coverage amount that is at or equal to the income of the working partner. Be honest and put your income as zero and your occupation as a stay-at-home parent.

This real-time application processing is how we’re able to provide an immediate decision on coverage eligibility. It’s a true anywhere/any device life insurance process. If an underwriter has a question about your application, they will ask you through email on a structured form you can access easily on your smartphone.

The only part of the buying process that may not be online is the medical exam.

Some qualified, healthy Haven Term applicants up to the age of 45 may be able to skip the medical exam entirely through our InstantTerm process.

Once an online life insurance application is submitted, we will know whether a medical exam is needed to verify that your health is as reported in the answers provided. Note: It’s very important to be honest when completing the application. Issuing the policy or paying its benefits depends on the applicant’s insurability, based on their answers to the health questions in the application, and their truthfulness.

If a medical exam is needed, you’ll have 90 days take it and are usually covered during that time. Once we get the medical exam results back, we’ll send you a final offer with your real, approved rate.

If a medical exam isn’t needed, you’ll receive a final offer upon submission of your application, and once you e-sign, you’re done. No phone interviews. No faxes. No nothing. You’re done. Give yourself a pat on the back for helping to protect your loved ones financially. 

Enjoy peace of mind

The idea of leaving behind your family is unfathomable. We know. However, preparing for the unexpected doesn’t make it happen any sooner.

Term life insurance coverage can be a key part of that sometimes-difficult preparation plan for a stay-at-home mom or dad. It’s a selfless service (on top of all the other selfless services they already provide) that offers not only protection for their loved ones but peace of mind.

Life insurance needs aren't one-size-fits-all.

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Tom Anderson

About Tom Anderson

Tom Anderson is an award-winning financial journalist whose work has appeared in CNBC.comKiplinger’s Personal FinanceMoneyMonocle and Wired. He was a 2008-09 Knight-Bagehot Fellow in Economics and Business Journalism at Columbia University.

Read more by Tom Anderson

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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