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Life Insurance Options for a Stay-at-Home Parent 

Life Insurance Options for a Stay-at-Home Parent 

Life insurance isn’t only for the family’s primary provider; stay-at-home parents should also put this financial safety net in place.

When you imagine the main family provider, most people think about the parent who brings home the bacon, or the breadwinner. It usually goes without saying that this person needs to have life insurance. Without this provider, their earnings, or life insurance, the family would struggle financially. 

But what about the parents that stay at home? What happens if one of them dies?

Continue reading to find out more about life insurance options for stay-at-home parents.

The life of a stay-at-home parent

An income is how a family pays for their lives: a car, food, house, bills, clothing, extracurricular activities, and more. So if a family has one parent staying home and the other working outside the home, they only need to have the breadwinning parent covered with life insurance, correct?

Nope. Life insurance for a stay-at-home parent is equally necessary as it is for the primary income provider.

If a stay-at-home parent made a salary, how much would they make? Over $180,000. That’s a lot of money (and responsibilities) to make up for if they weren’t around anymore. Stay-at-home parents wear a lot of hats and have nearly countless responsibilities. Think about all of the duties and roles of a stay-at-home parent:

  • Chief operating officer.
  • Housekeeper.
  • Laundry manager.
  • Bookkeeper.
  • On-call nurse.
  • Chef.
  • Server.
  • Conflict manager.
  • Chauffeur. 
  • And so much more.

Being a stay-at-home parent is a rich and rewarding role, but the parenting duties and responsibilities always seem to continue! The hours add up.

Data collected from shows that stay-at-home parents spend, on average, 54 hours weekly managing things at home, in addition to any hours required for jobs outside the home. Add it all up, and you’ll find that they spend nearly 110 hours each week split between work and home.

If both parents were working outside of the home, families would have to pay someone else for all of these services or figure out a way to do it by finding the time to do them themselves. Between driving the kids around, cooking meals, going grocery shopping, doing the laundry, cleaning the house, and more, there’s a lot to make up for — close to $200,000 worth.

A happy family smiling and posing for a selfie together - Life Insurance for a stay-at-home parent

Life Insurance for a stay-at-home parent

When purchasing a life insurance policy for a stay-at-home patron, it’s essential to consider the costs of replacing all they do inside the home. It’s also important to think about how long these responsibilities will need to be taken care of. 

If you are shopping for stay-at-home parent life insurance, ask yourself, are your kids young, or can they babysit themselves at home? The younger the kids, the more years parents will need help taking care of them, meaning the more insurance coverage necessary for stay-at-home parents.

It makes sense for a stay-at-home parent to have enough life insurance coverage to last until all of their kids are at least 18 and out of the house. If parents plan on paying for their children’s college educations, the coverage should have a longer term.

Other reasons to consider life insurance for a stay-at-home parent 

Not only will a life insurance policy payout provide the surviving parent with the money to cover the necessities, such as childcare costs, but it also helps cover final expenses. The National Funeral Directors Association (NFDA) reports that the median cost of a funeral with cremation costs, on average, nearly $7,000, while a funeral with viewing and burial costs over $7,800.

These costs do not include monument, marker, or cemetery costs. Additionally, lingering or outstanding medical bills and other types of expenses need to be covered.

In addition to providing the family a financial safety net, the stay-at-home parent may also want to leave their children an inheritance, and a life insurance policy is a good way to do that. By putting life insurance in your children’s trust, you can pass on an inheritance to them.

What is the best life Insurance option for stay-at-home parents?

Term life insurance policies are the best life insurance option for most stay-at-home parents. This type of insurance is made only to last a specific period of time — the length of the term — and that length is determined by you, the policyholder. Term lengths vary and can last as little as 10 to 40 years, depending on the policyholder’s age. The younger your kids are, the more time you’ll want life insurance coverage.

Stay-at-home parents looking to buy term life insurance can customize their policies and find one that fits into most families’ budgets. Many $250,000 policies monthly premiums are less than $9 for a 10-year term and as little as $22 for a 40-year term.

Term life insurance policies have fixed premiums. This means if you bought a 15-year $250,000 term life insurance policy, the monthly rate would stay $9.19 the entire term and would not increase during the 15 years, even if you were to develop a health condition.

What about permanent life insurance policies?

Term life insurance policies aren’t the only option for stay-at-home parents. A permanent life insurance policy, such as universal life or whole life, is another option; but it typically costs more than term life policies.

Permanent life insurance policies may make sense for certain families, such as higher-income families who have covered their other financial planning bases, like having an emergency fund saved, maxing out retirement saving options, saving for their kids’ college educations, etc.

One major perk of permanent life insurance policies is that they build cash value. It is money policyholders can use down the line if the policy builds up enough value. This policy gives policyholders planning flexibility later in life.

Yet, the high investment cost of permanent life insurance policies may deter young families from juggling other necessary expenses, despite these policies building a substantial cash value.

If you are interested in permanent life insurance policy options but currently need a place to make that investment, be aware that term life policies often offer a term life conversion option that allows policyholders to switch their policy to permanent life insurance. 

Stay-at-home parents may be able to take advantage of that option if they eventually go back to work and have a higher household income and budget.

A family enjoying a leisurely stroll in the park during the autumn season, surrounded by colorful foliage. - Getting life insurance coverage for stay-at-home parents

Getting life insurance coverage for stay-at-home parents

Calculating the amount of term life insurance a stay-at-home parent needs might be a little challenging at times. Life insurance companies have rules and restrictions on how much life insurance coverage an individual can have. Life insurance isn’t meant to increase wealth, nor is it an investment tool. Its primary purpose is to replace lost income due to death.

As a general rule of thumb, many insurance experts advise stay-at-home parents to have 10 to 20 times their current income to maintain their families’ standard of living. But, because stay-at-home parents do not generate a paycheck, it’s sometimes challenging to determine how much coverage they should be approved for.

Most life insurance companies allow the stay-at-home parent to have as much coverage as the income-earning spouse. If the breadwinner makes a significant amount of money and has a significant amount of life insurance coverage, insurance companies may limit the coverage amount for the stay-at-home parent.

Your best option when shopping for life insurance policies is to find a trusted insurance professional to help with the process.

Get life insurance at Bear River Mutual Insurance today

Are you looking for the right life insurance coverage for you or your partner? The professionals at Bear River Mutual Insurance are here to help!

Whether you’re the breadwinner of your family or are a stay-at-home parent, having a life insurance policy for yourself is one of the best investments you can make. When finding the right policy is overwhelming and intimidating, our knowledgeable team is here to help.

Life insurance is an essential part of life and offers families and individuals a financial safety net should the worst happen. The team at Bear River is here to guide you and your family through the process of finding the right policy that meets your specific needs.

Whether you need life, business, health, home, automobile, or another type of insurance, contact the trusted Bear River Insurance professionals. We are committed to helping you find the best policy that is the ideal balance of value, benefit, and security for you and your family, assuring you and your loved ones are taken care of.

We have three convenient locations throughout the Wasatch Front to best serve you, your business, and your family. Find us in Provo, Orem, and Salt Lake City.

Contact the Bear River Mutual Insurance professionals today to get a free quote.

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