Stay-at-Home Parents Need Life Insurance Tooby Byron Udell, AccQuote Founder and CEO
Note: This article is part of a series by Byron Udell, founder of CEO of AccuQuote, one of the largest independent life insurance brokerage firms in the United States. We are pleased to retain AccuQuote as Edelman Financial’s insurance partner, for insurance is a crucial element of financial planning.
Byron, one of the nation’s foremost experts in the field of life, disability and long-term care insurance, has more than 25 years of industry knowledge and was a pioneer in providing free term life insurance quotes online. Today hundreds of thousands of consumers have benefited from his work. Contact your Edelman planner to discuss your insurance needs. Working with AccuQuote, we’ll find you the best and most affordable insurance solutions consistent with your financial planning needs.
Many experts encourage stay-at-home parents to obtain life insurance coverage. Why? Even family members who don’t earn a salary make effective financial contributions.
When you combine the hourly rate for the services the typical stay-at-home parent provides, including child care, cooking, cleaning and transportation, the cost comes in at $30,000 to $40,000 annually. While stay-at-home parents may not bring home a traditional paycheck, the value of their responsibilities quickly adds up.
If the stay-at-home parent in your household died today, would you have to:
- Take on additional employment to make up for financial loss?
- Hire a nanny for your children?
- Withdraw emergency funds from a savings or investment account?
- Hire a tutor to help your children with their schoolwork?
- Hire a housekeeper to maintain a clean and healthy environment?
- Hire a driver to transport your children to their extracurricular activities?
- Reduce flexible spending habits?
These are the factual reasons why stay-at-home parents should have term life insurance coverage. But many people overlook one of the most important factors: the inevitable lost income of the surviving spouse.
The psychological damage that is created when a child loses a parent can be significant. To a young child, the loss of a parent is nothing less than emotionally devastating. According to a recent study in The Wall Street Journal, children who lost parents at a young age were more likely to be hospitalized for depression or to commit violent crimes. The same study revealed that two-thirds of children who lost parents at a young age “felt like they weren’t a kid anymore.”
If the stay-at-home parent in your household died today, you would be faced with two difficult decisions:
1. Keep working, hire a nanny and risk your child’s psychological state.
2. Stop working, at least for a while, and be there for your children during a time of grief.
While life insurance can’t replace a parent, it does provide the spouses of stay-at-home parents with the financial flexibility to take time off work and grieve with their children. Without life insurance, families often do not have that option.