Why Stay-at-Home Moms Need Life Insurance

5 Reasons Stay-at-Home Moms Should Consider a Life Insurance Policy

A picture of a life insurance policy for a stay-at-home mom
•••

Ruban Hidalgo / Getty Images

Many families wonder if stay-at-home moms need a life insurance policy in place. As a stay-at-home mom, you may write off the idea of a life insurance policy for yourself because you're not the one bringing home the bacon, so-to-speak. However, the impact of losing you would not only be emotionally shocking for your family, but it could also be financially devastating. A mom's last will and testament protects her family's future and so does a whole life insurance policy or term life insurance policy. There are many reasons why stay-at-home moms need life insurance in place.

Before you say you're "just" a stay-at-home mom with no financial contribution to your household, consider these five reasons why your role is more than worthy of a life insurance policy:

A Life Insurance Policy Can Cover Household Expenses

These are the many job titles Salary.com gives stay-at-home moms in its annual Mom Salary Survey, among which are:

  • Chief Financial Officer
  • Chief Operating Officer
  • Logistics Analyst I
  • Housekeeper
  • Laundry Manager
  • Van Driver
  • Public School Teacher
  • Facilities Manager
  • Meeting/Event Planner I
  • Kitchen Manager

In its 2021 survey, the same website says stay-at-home moms in the U.S. would earn $184,820 per year for their many job roles.

Still think you're a stay-at-home mom with no cash value?

Just because you're not receiving a signed paycheck doesn't mean you don't contribute to your family's income. If something happened to you, your spouse is probably going to need some outside help to cover your absence.

In 2006, financial guru Dave Ramsey estimated a $400,000-$500,000 policy would be necessary to make up the costs of everything a stay-at-home mom does every day. You can't be replaced, of course, but someone can be hired to help keep your family functioning as normally as possible under the circumstances.

A Life Insurance Policy Can Help With Child Care

One of the biggest, long-term expenses your family will face without you is the cost of child care. Parents paid an average of $26,102 to $18,442 in child care expenses (depending on the region), according to a 2019 report from Child Care Aware of America.

A spouse whose job requires travel or nighttime hours is going to be hit even harder. Extended care and evening hours can quickly eat into a family's bank account.

Without you, someone else will have to take care of your children while your spouse is working. Choose a life insurance policy amount that includes these annual costs.

A Life Insurance Policy Can Pay for Education

For homeschooled children, losing their mom also means losing their teacher. You and your spouse need to decide who will educate your children if you were to pass away. The cost of private schooling or a private teacher is a consideration for your life insurance needs if you prefer to keep your children out of public schools.

A life insurance policy can also help pay for your kids' college education. According to College Board's Trends in Higher Education series, college tuition has hiked 1.1% since 2019-20 for public four-year universities and 2.1% for private four-year universities. These increases have not accounted for inflation, according to the report.

That's about $120 to $770 more in just one year. If a mom of young children died today, think of how high a college tuition's price tag will be set by the time her kids are 18.

According to the same report, a four-year student entering a public college in-state in 2020-21 will pay an average of $10,560 per year for their tuition.

Your life insurance policy may not cover all of the costs of a college education. It can be a soft cushion for your child to get an education without accumulating a lot of debt, though.

You Can Leave Your Kids an Inheritance

We want to give our children so much. Toys when they're younger. Cars when they're old enough to drive. Beautiful weddings they'll never forget.

You can leave a small nest egg behind to help your children when they're grown. Giving your kids a portion of your inheritance can give them a head start when they're adults. It's not the same as having you there, but it's one way to help your family out if you're not able to be around.

An inheritance doesn't have to be millions of dollars. Busting your budget on extra life insurance now so your children can benefit after you're gone may not be cost-efficient for many families.

Your Family Won't Be Saddled With a Funeral Bill

The National Funeral Directors Association reports an average funeral cost of $7,640 for 2019. That's a price tag many families couldn't absorb without life insurance.

Add on the new expenses for running the household, child care and education, and losing you has become a major financial setback your family has to deal with on top of their grief. The good news is your life insurance policy can help offset all of this potential loss of income. Money won't take your place, but knowing your family will be taken care of if you're unable to can give you peace of mind.

Chances are, you'll be here to spoil your grandchildren and maybe even your great-grandchildren. For many families, though, paying a life insurance premium's few dollars a month makes perfect sense. With a little research, you can find a life insurance policy that fits in with your family's budget that will help you sleep at night, knowing your family is protected should something happen to you.

Related: Best Whole Life Insurance Policies