Does the Whole Family Need Life Insurance?

For most households, life insurance offers a way to replace income if the unexpected happens. However, in many cases, it makes sense to purchase coverage for stay-at-home spouses or even children. Here are some of the considerations to weigh.

For breadwinners, life insurance is a must-have coverage in many households. Employers often offer group term life insurance as part of a benefits package, but not all employers offer the coverage and these limited policies may not offer enough financial relief for families. Often, employer-provided policies can only replace income for a year or two. A policy that you can control offers freedom to choose your own death benefit amounts and provides more ways to structure your policy.

Stay-at-home moms and dads sometimes have lower incomes, but don’t underestimate the financial value a stay-at-home spouse can bring to your household. Stop and think about the cost of replacing all the services often performed by stay-at-home moms and dads. How much does childcare cost in your area? How about house cleaning services or the cost of a provider that can transport your kids to youth sports events, karate, or dance classes? Now multiply the cost by 20 years, the time your kids will be dependents.

Over a longer time period, you may be able to measure the financial contribution of a stay-at-home parent in the hundreds of thousands of dollars. Purchasing life insurance for stay-at-home spouses may not be everyone’s first instinct, but a family that plans for the unexpected is better prepared if the worst-case situation happens.

Life insurance for kids may be the most affordable choice of all. If your kids have student loans and you’ve cosigned, life insurance can be especially important. Age is a big factor in the cost of life insurance, so kids have us all beat when it comes to premium costs. However, the value of coverage can’t be overlooked. A life insurance policy purchased now can guarantee low rates for your children for the rest of their lives. Some types of policies also have limited time periods for premiums, meaning the policy is paid off after a set number of years and the coverage remains in place for a lifetime.

We hate to think of any situation in our family that can trigger a life insurance claim, but not having coverage in place can make an already difficult time even more trying if the unexpected happens. Fortunately, life insurance is more affordable now than in the past and you may be able to protect your family for less than you think. Just reach out to your agent or broker to discuss your needs. Today’s policies can be customized, allowing you to choose how much coverage you have and how long your coverage is guaranteed.