Are you a stay-at-home parent who needs to buy term life insurance?
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For the first time in decades, the number of stay-at-home parents is on the rise in the United States. This isn’t because families are more financially stable and they have the luxury to not need a second income, but mainly because the cost of child care has increased so dramatically it makes more sense for a parent to stay home versus pay for daycare or a nanny.
*Numbers from The Street article Here’s the Cost of Child Care in Every State
According to a 2017 Care.com survey, 1 in 3 respondents said they spend at least 20% of their annual household income on child care. 73% of these respondents say their job has been affected because of child care plans falling through at the last minute with 64% having to use sick days and 54% being late to work as a result. 40% also noted that child care costs have caused tension in their relationship.
With these statistics, it’s no wonder the number of stay-at-home parents is on the rise. But, when asking parents if they have life insurance coverage, I frequently hear, We just haven’t gotten around to it yet.
» Calculate: Life insurance needs calculator
Stay-at-home parents not only benefit the child but the working parent as well. They help their spouse have the flexibility to work late if needed, go on business trips, and basically just provide the family steady income without having to worry about the children. And, because the working parent is able to focus on work during work hours and the stay-at-home parent can manage the house, weekends can be spent making memories versus running errands or knocking out chores.
Being a family is teamwork and not every team’s strategy is the same. You don’t have to keep up with the Joneses—do what works best for your family. But, as you’re planning for your children’s future, don’t forget about the importance of buying term life insurance.
People assume the process of applying for life insurance is time consuming, but, with technology it really only takes a few minutes to find the right policy for your family.
With Quotacy it really only takes a few minutes to find the right term life insurance policy for your family.
How to Buy Term Life Insurance for Your Spouse
What people often don’t realize is that you can apply for life insurance for your spouse. For example, a stay-at-home parent could go online and complete the entire application on behalf of their working spouse. The working spouse would eventually have to electronically sign the application, complete a brief phone interview with a representative of the insurance company, and, if applicable, take a medical exam. But this medical examiner can even go to their workplace at a time of the spouse’s choosing.
When you start researching term life insurance for your working spouse, know that he or she will still be the owner of the policy. The stay-at-home parent (ahem, you) will simply nudge them in the right direction to get the process started.
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Here’s what that looks like on paper:
When you go to get a quote and apply for insurance, you’ll simply fill out an application for your spouse and enter their information, not yours.
You can see what that looks like in the screenshot below:
Another option is for you, the stay-at-home parent, to own life insurance on your spouse. If your other half is too busy to add another to-do to their list, it might make more sense for you to assume the policyholder role. Let’s talk about how that works.
How to Apply for Life Insurance on Your Spouse
Yes. You can opt to own a life insurance policy on your spouse. For example, a stay-at-home parent could go online and complete the entire application naming their working spouse as the insured. The stay-at-home parent could be both owner and the beneficiary. The working spouse would still need to give consent and be available for the phone interview and, if applicable, the medical exam, but in this situation the stay-at-home parent would have control of the policy.
Both of the options above are fairly common, so it’s really about figuring out which one works best for your family.
Life Insurance for a Stay-at-Home Parent
Last but certainly not least, I want to remind you stay-at-home parents how important it is for you to also be insured. It’s obvious that a working parent needs life insurance. If this parent died unexpectedly the income would stop. Life insurance is there to replace that missing income.
However, what happens if you were to unexpectedly pass away? As we discussed before, child care isn’t cheap and now a single income would need to pay for it. How will the children get to and from school? Who is packing their lunches? When will the house get cleaned? When will groceries be purchased?
It is very likely the working spouse’s job schedule would also need to change drastically. Remember that life insurance is there to replace missing income, not just working income. Analysts say a stay-at-home parent’s salary is equivalent to $162,581 per year.
With life insurance, the death benefit could cover the costs of a funeral and enough to hire a nanny, pay for a housekeeper, or help cover school tuition.
Whether you’re looking to purchase life insurance on yourself or on your spouse, Quotacy can help make the process easy. Start by getting a term life insurance quote today.
» Learn more: Life insurance basics for families
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