With over two Millions of women are leaving the workforce due to the circumstances of 2020 (according to CNBC) Finding life insurance options for non-working parents is more important than ever.
Fortunately, non-working spouses can get life insurance. However, you need to look beyond the traditional life insurance offerings.
I’ll take a closer look at what non-working parents should be looking for when considering their life insurance options.
As a non-working parent, do you need life insurance?
Life insurance can be an uncomfortable topic at any stage of life. However, if you have a family, you probably need to consider life insurance to protect their financial future. While getting life insurance as a non-working parent can be more of a challenge, it is an important way to financially protect your loved ones.
If you are a staying home parent you may not think that you need life insurance. After all, it is The purpose of life insurance is to provide income replacement for relatives when something terrible has happened to the breadwinner.
Since you are technically not making income, you don’t need life insurance, do you? Not correct! Staying home parents provide the household with a long list of valuable services that should be continued if something happened to that parent.
Some services that non-working parents might offer include childcare, tutoring, and household managers. Of course, these are just a few things on a long list that staying home parents may tackle.
The surviving working parent likely could not do all of the work of a parent who stayed at home. That could lead to these services being paid for. With a Average annual cost of $ 14,760 for daycare aloneIt’s easy to see how the worth of an inactive parent would mean significant economic loss to a family. This is where life insurance comes into play.
As a non-working parent, can you take out life insurance?
If you are a recently unemployed parent, a life insurance company can offer a policy based on your previous income.
Still, if you are a home parent, you can still get life insurance to give your family peace of mind. As mentioned earlier, having a home parent adds value to your family. If you died, your family would be in dire financial straits.
Fortunately, insurance companies agree that having a parent who stays at home adds value to the family. With this there are guidelines for protecting the financial input of the parent who stays at home.
You should start with a company like this Policy geniuswho can show you several insurance offers at the same time. From there, you can see which companies are offering you the best prices, even if you are a parent who stays at home.
As a non-working parent, how do I buy life insurance?
If you are a home parent looking for life insurance, here are the steps you need to take.
Determine how much life insurance you will need
As with any life insurance shopping experience, you need to decide what type of life insurance you need. Depending on your situation,Term life insurance or life insurance can be the way to go. However, you still need to determine how much life insurance coverage you will need.
To determine that number, first consider the value that you as the parent deliver to the home. Some important considerations are:
- The cost of childcare. What is the average childcare cost in your state?
- Education costs. Would your kids need a teacher’s help if you weren’t helping with homework? Would your children go to private school if you couldn’t continue their education? Determine the costs associated with these results.
- Housekeeping. Who would take care of the house if you weren’t around? If the working spouse had to pay for someone to help with cleaning, these costs should be considered.
It is clear that the numbers you come up with will vary dramatically based on your family and location. But think about what your family’s budget would be if you didn’t take care of your usual chores.
Once you have an estimate of your annual financial contribution to the family, multiply that number by 10. This gives you a good basis to begin your life insurance search.
It is important to note that you may not be able to determine the guideline size you want. As a rule, parents who stay at home are entitled to around 50% of their spouse’s insured sum. You may not be able to get the coverage you are hoping for, but solid life insurance is better than giving up.
How much life insurance coverage a parent needs at home: an example
Take a look at this example. Let’s say you’re a home dad in Florida who watches your young children and takes care of your household. The The average cost for a daycare in Florida is $ 8,376 and a weekly house cleaning would cost about $ 150.
When you factor in other services like meal cooking, laundry maintenance, and various other chores, you will likely find that you provide at least $ 40,000 in valuable services to your family each year. But you might find yourself closer to the estimated annual salary of $ 178,201 determined by Salary.com.
Let’s say you’ve found that you are bringing your family an annual economic worth of $ 50,000. At this point, you can multiply $ 50,000 by 10 to land around $ 500,000 as the ideal coverage for your life insurance.
Looking at a number for coverage, it’s time to look around. Don’t be surprised if insurance companies ask you more than the usual questions. As a non-working spouse, you should expect this. Here are my favorite ways to buy life insurance:
Policy genius is an insurance market with no affiliation to any particular company. Policygenius allows you to quickly fill in basic information about yourself and it will show you the best options available.
Use this easy-to-use platform to find life insurance options for both non-working spouses and working spouses. You and your spouse can also get cover together.
The benefit of seeing multiple policy options in one place is extremely convenient. While you may need to take additional steps with the insurer you choose, this quick process is worth considering. If you run into any questions, a licensed insurance agent will be happy to help.
To lend offers a range of term life insurance policies. You won’t find any life insurance options here, but life insurance terms range from $ 50,000 to $ 1,000,000 with a term of 10 or 20 years.
The main benefit of working with To lend is that you can complete the process of getting life insurance entirely online. Right. You don’t even have to pass a personal medical exam. Instead, secure your final price within minutes and move on with your day.
Life insurance is an important part of a family’s financial well-being. Don’t discount the importance of life insurance for an inactive spouse! Take the time to consider your family’s life insurance needs.