Life Insurance for Stay at Home Parents

Many people mistakenly believe that a parent that goes out to work only requires coverage in the form of life insurance. They also think that stay-at-home parents do not need to be a part of any such plan. This particular belief is flawed as life insurance for a stay at home parent is as important as for any other person.

If something were to happen to the parent, the person with the financial responsibility will have to take care of both roles. Thus, as a stay-at-home parent, you should consider getting life insurance coverage and start researching different options.

Reasons why Life Insurance for Stay at Home Parents is Important

If you’re still not convinced, here are some reasons that will make you think otherwise.

1. Value of Your Work

happy parents at home

As a stay-at-home parent, you are responsible for more than just taking care of the house chores. You might take up the role of a tutor or even a cook.

Moreover, you do not get a break from carrying out all these tasks either. Life insurance can also be a means to get compensation for all your hard work while playing the role of a stay-at-home parent.

Thus, by getting life insurance for parents, you earn a chance to make up for all the income you lost due to your responsibilities.

2. Taking Care of the Debt

If you have any student loans or other kinds of debt under your name, the only chance to pay them off is by applying for coverage. This is because you will not be earning any income and paying off your debt can become impossible.

In case the unthinkable happens, your family will have a financial cushion to fall back on and will not have to worry about your loans.

3. Final Expenses

Nobody likes to think of the time they will eventually leave this world. However, since as a stay-at-home parent you are used to keeping the needs of others above your own, you must frequently wonder how your family will bear this loss. While you cannot do anything to support them emotionally, you can do so financially.

Life insurance coverage can help pay for your funeral and other end-of-life expenses. By knowing that you have taken care of your last responsibility, you will feel at ease and worry less about what would happen after your demise. We always give importance to funeral insurance for seniors over 80 years.

4. Accumulate Savings

There are certain life insurance policies that help you benefit from the cash value feature. You can choose such a plan in case you like to accumulate savings.

However, you should know that the amount you take out of your plan will be deducted from the total death benefit. As kids grow older and you have extra time, you can use these savings to invest in something or pay for college tuition or a down payment.

5. Planning for Child Care

As a stay-at-home parent, you are the one who takes care of kids while your spouse is away for work. The thought, that who would take up your role after your demise, would have crossed your mind more than once.

Luckily, if you get life insurance coverage, you can arrange for future childcare. Your spouse can use this money to find help and doesn’t have to take bold decisions about his/her career just to fill the void that you have left behind.

6. Leave Something Behind for Your Children

Apart from serving as a support system for your spouse, life insurance can also act as a facilitator for your children. If you wish to leave a budget-friendly inheritance for your kids, you should consider getting life insurance. Such coverage can give your children financial support as well as help you gain self-confidence.

Understanding the Different Policies Available

There are many insurance options available to you depending on your age and health condition. Here is a brief overview of different plans:

Term Life Insurance

This kind of insurance offers coverage for a particular number of years. The policy works in such a way that it pays the benefit to the beneficiary (usually your spouse) in case you pass away during the term of the insurance.

If, however, the term ends during your lifetime, you can use this money as accumulated savings. For such a plan, you also have the option to convert it into whole life insurance later in case you wish to extend the insurance.

Whole Life Insurance

The other type of plan is permanent life insurance, which is usually available in the form of whole or universal policies. Such coverage lasts through your lifetime and at the end pays the amount to the beneficiary.

It is an ideal choice for people who want to leave an inheritance or provide financial support to the working parent in case of the policy holder’s demise.

How to Determine the Best Life Insurance Policy for Stay at Home Parents

Once you decide in favor of getting a life insurance plan, you should start educating yourself about the different options available. It is normal for people to feel overwhelmed when they look at a variety of policies.

Taking Help from an Insurance Agent

To make sure that you take the right decision, experts recommend that you seek help from an insurance agent. Such an individual can help you understand the details of each policy.

Moreover, since it is vital that you do a thorough need-analysis before selecting one option, you can discuss all your concerns with an insurance agent. He/she can give you an estimate of the amount that you would need to achieve your financial objectives.

Finding the Best Plan

Once you know exactly what you wish to cover with the benefit of this plan, you are ready to take a decision. Usually, term life insurance is widely suggested to stay-at-home parents as it provides coverage for a particular time period. You can get this policy and extend it to the point when your kids grow up and become financially independent.

Other than that, you can also consider getting whole life insurance that stays active throughout your lifetime. You will not have to worry about converting your policy and paying a fixed amount in premiums.

In case you have sufficient debt under your name, this policy can help your family members pay it off.

Final expense insurance is chosen by individuals who only wish to provide enough financial support to their loved ones to pay for funeral and other final expenses. If you do not have dependents or debt, you should opt for such kind of insurance.

How to Choose the Right Insurance Provider

Apart from deciding on the right plan, it is also important to look for the best provider. With so many companies, it can be difficult to choose one. While an insurance agent can help you with this task, there are also some factors that you can look at to choose a reliable provider.

 Here are some attributes that the right insurance provider will have:

1. Great Reputation

You can tell a lot about a company by looking at the reviews available online. Find out if the current customers are happy and if the provider is good at keeping their promise. If you want to look for a company that is reliable, it is best to ask your family and friends for suggestions.

 You will find all the information you need about a company’s track record online. If a particular provider has plenty of claim disputes or cancellation requests, you might want to stay away from getting coverage from them.

2. Flexibility

While the requirements of one type of policy are generally the same across different providers, there are some that have stringent rules and regulations. If you have a particular health condition or do not think that you can pass all the requirements, you should look for a provider that offers flexibility. For this purpose, you will have to shop around before you can find the right one.

3. Variety of Plans

All of the insurance providers provide their clients with coverage options, such as Term and Whole life insurance. But if you keep looking, you may also come across some companies that have introduced new plans and options.

Also, there are certain providers that can customize the policy according to your needs and wants. Seek a provider that has a lot of variety to offer when it comes to plans.

4. Competitive Premiums

Just because all the providers have similar plans it does not mean that the premiums will be exactly the same too. You will be surprised to know how much variation there is when it comes to the number of premiums.

 It would not be right for you to pay a higher amount for a policy that you could get for a lower monthly rate. Thus, shopping for the right insurance provider is essential if you want to save up more money.

Once you do a thorough analysis of all the rates offered by insurance companies, you will get an idea about what you should be paying for a particular plan.

5. Financial Standing

There are many firms that provide information about the financial standing of a particular company. You have to make sure that the company you choose has a strong financial background. Since life insurance plan extends for a long period of time you need a company that you can fall back on.

It is not necessary that the size of the company is a direct reflection of its financial stability. Thus, you will have to go through resources provided by trusted firms to find out which company is financially strong.

After looking at all the above-mentioned points, you can make a better decision when choosing the right insurance provider.

Determining Your Needs

It is imperative that you do a need analysis before going out to buy life insurance. If you are not aware of how much you need in life insurance, you are at risk of paying too much or too less for a life insurance plan.

A life insurance agent can also help you determine the right plan for you after assessing your needs and wants. If you are on the fence about signing up for a life insurance plan, you should talk to an agent who can help you figure out whether such coverage is right for you or not.

To calculate what should be the amount of insurance benefit, you should consider how much your spouse will need in order to juggle both the duties.

Also, the cost of caring for children and carrying out different household tasks are taken into account. In the end, the agent will include the funeral expenses in the plan’s amount and come up with a total figure which should be your coverage.

Moreover, you will also need to determine the term of the plan. To choose the right one, you should think of the period during which the family will get affected financially because of the stay-at-home parent’s demise.

Bottom Line

Not getting life insurance as a stay-at-home parent is a mistake that you should not make at any cost. Just because you are not the breadwinner in the family does not mean you are not entitled to such coverage.

There are many reasons, as mentioned above, for applying for coverage. It is a responsible action that an individual can take in order to cover for the expenses that are most likely to arise in case the stay-at-home parent passes away.

By having such support by your side, you can enjoy peace of mind and lead your life stress-free.

You must know that the work you do around the house has value and you are doing something to make the life of your loved ones stress-free after your demise.

By getting help from an insurance agent you can make the process of choosing the right plan extremely convenient. So, do not delay this decision and apply for coverage with flexible requirements and a premium that fits your budget.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.