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Why Stay-at-Home Parents Need Life Insurance
Stay-at-home parents contribute immensely to their families, often in ways that aren’t directly tied to a paycheck. However, their economic value is significant. For instance, a 2023 Care.com study revealed that families spend about 24% of their household income on child care. The weekly average cost for child care is $293, or $755 for a nanny. If a stay-at-home parent were to pass away, the surviving parent would need to cover these expenses out-of-pocket. Therefore, life insurance is crucial for stay-at-home parents to ensure their family’s financial stability in the event of their death.
What Life Insurance for a Stay-at-Home Parent Can Cover
Life insurance for stay-at-home parents can help cover the costs of various services they provide, such as:
- Child care
- Housekeeping
- Meal preparation
- Driving
- Teaching
- Pet sitting
- Tutoring
A 2021 Salary.com study estimated the median annual salary equivalent of a stay-at-home parent at $184,820. This figure highlights the cumulative value of their daily tasks. If something happens to them, the surviving parent might have to pay a substantial amount for these services.
How Much Life Insurance Does a Stay-at-Home Parent Need?
Determining the right amount of life insurance for a stay-at-home parent involves considering the costs of replacing the services they provide. Here are some guidelines:
- Child care costs: Research the costs of child care services in your area. If you have a larger family, adjust your death benefit accordingly.
- Household help: Factor in the cost of hiring help for household chores. The average hourly cost for housekeepers is around $15.
- Children’s ages: Ensure your death benefit is sufficient to cover your children’s needs until they are adults.
- Surviving parent’s work plans: Increase the death benefit if the surviving parent plans to reduce work hours or take time off to support the family.
Working with an independent insurance agent can help you find the most suitable policy tailored to your family’s needs.
Maintain Good Credit for Extra Security
In addition to life insurance, maintaining good credit and building an emergency fund can provide extra security. This can be particularly helpful if the working parent loses their job. Regularly check your credit report and take steps to improve your credit if necessary.
At O1ne Mortgage, we understand the importance of securing your family’s future. For any mortgage service needs, call us at 213-732-3074. We’re here to help you find the best solutions for your financial security.
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