Do stay-at-home parents need life insurance? We answer this question in today’s Quotacy Q&A Friday video by explaining why it is important for all parents to have life insurance and how much life insurance coverage stay-at-home parents can apply for.
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Welcome to Quotacy’s Q&A Friday where we answer your life insurance questions. Quotacy is an online life insurance agency where you can get life insurance on your terms.
I’m Jeanna and I’m Natasha.
Today’s question is: Do stay-at-home parents need life insurance?
Term life insurance is typically known as income replacement, so it’s a common misconception to think that because the stay-at-home parent does not provide actual income, that this person would then not need life insurance. And this couldn’t be further from the truth. One parent often stays home with children to not only spend quality time with them but because paying for daycare is expensive.
Quotacy is located in Minnesota and here in Minneapolis the average annual cost of daycare for two children is $24,570 and the cost of hiring a nanny is $26,838. For many people, that could be more than half their annual income and many families decide it’s not even worth both parents working if such a high percentage of their money is just going toward someone to stay home with their kids while they’re at work.
Thinking about just daycare alone, if a stay-at-home parent were to die unexpectedly, the surviving parent needs to find an extra $24,570 per year. The surviving parent will also need to find time to transport to and from school activities, grocery shop, cook meals, clean the house, and do laundry. Or simply hire someone to do these things.
Should a stay-at-home partner pass away the life insurance death benefit could cover the cost of the funeral and provide funds to hire a nanny, pay for a housekeeper, or help cover school tuition.