If you’re a stay at home Mom, life insurance is probably the last thing on your mind. Finance writer Catherine Alford explains why it should be considered.
No one wants to think about life insurance and why we need it, but after experiencing the loss of a friend recently, I feel compelled to mention it again. Here's what happened:
When I found out I was pregnant with twins, I immediately went to find a support group online. I stumbled across a group of women who were also pregnant with twins with similar due dates to mine. Together, we formed a strong bond—one that remains to this day.
Even though we started out as strangers on the Internet with similar due dates, we became close friends. Through a private Facebook group, we weathered the uncertainties of twin parenthood together. We walked through our pregnancies together, supported those who went into labor too early, cried with those who miscarried, and cheered each other on as we gave birth.
What we never expected, though, is that we'd lose one of us.
It happened a few months ago. A mom in our group contracted the flu and became very, very ill. She was a stay at home parent of five children. Her twins were her last two kids, so she helped some of us newer moms navigate the scary world of parenthood in the early days. Her twins were born just one day apart from my twins.
One day she was there as a stay at home mom. Then, she got the flu. A few days later, she was fighting for her life. And then, she was gone.
The Importance of Preparation
However, it's not often I bring up the importance of insurance. Many stay at home parents don't realize that they can get a policy all their own. It's natural to think about a working spouse having insurance, but more stay at home moms should consider getting a policy, too.
Think about it. If you're a stay at home parent and you suddenly passed away, what would your family do? If you were the primary caregiver, will your family have enough money to replace you? Obviously, no one can replace you, but think about everything you do for your family day in and day out.
Who will bring your kids to the park while your spouse goes to work? Who will make their lunches and prepare dinner? Who will wash a million loads of laundry every week?
The work that stay at home parents do has immense value to their family. If you calculated how much it would cost to hire a nanny, a cook, and a housekeeper, the cost would be astronomical.
That's why it's so important to prepare for a worst case scenario. It's not something pleasant to think about—not even close. A mother never wants to imagine what it would be like for her family to grow up without her. However, it happened to my friend. She was only 32 years old.
To think about her twins waking up every day without her literally breaks my heart. I hate that she wasn't there to see her twins turn four, to hear how funny they are every day, and to see them start their first day of school. And, like I said, she has three other children too who now have to navigate junior high and high school without their mom.
Nothing will take away her family's pain of navigating life without her. No one will ever be able to replace their mom. However, since she was a stay at home mom and the primary caregiver, her husband now has significant new responsibilities on his plate.
I don't know whether or not she had life insurance, but I know that if she didn't, it's likely very difficult to replace everything she did for her family.
How to Fit it Into Your Budget
Another reason to consider purchasing this type of insurance is because it can be relatively affordable. There are many different life insurance products available, but typically, financial experts recommend getting a 20-30 year term life insurance policy for around 10-12x your yearly income. You may want to work with an agent or financial professional to determine the right type of life insurance product for your situation.
Since stay-at-home moms don't have a typical income, you can add up the yearly cost of child care, housekeeping, etc. and then multiply that by 10 or 12. A recent Forbes article reported that stay-at-home moms should get paid around $115,000 per year for what they do. If you use a number similar to that, you would be considering an insurance policy that's worth just over $1 million. That means that if something happens to you, your family would receive $1 million that they could then use to help pay for a funeral, hire help, and more.
I personally carry a 1.5 million term life insurance policy on myself because I run a business in addition to staying home with my kids during the week. The monthly cost for this policy is very minimal, and I add it into my budget just like I do for anything else. Even a lower amount of coverage, such as $300,000 or $500,000 is better than having none at all. Smaller policies can cost as little as the price of going out to eat twice in a month.
So, please take the time to consider this if you're a stay at home parent. No one wants to think about the worst happening, but if it does, at least you know your family will have solid financial footing as they try to find their new normal.