Why You Must Buy Life Insurance For A Stay At Home Spouse
Who should you buy life insurance for in your family? When asked this question, most people have learned to automatically answer that a policy should be purchased on the bread winner. While this is true, failing to buy even a small term policy on the stay at home spouse can be a brutal mistake.
Picture our example family for the purposes of this article. We'll go with the classic nuclear family - a husband, wife and two kids. The husband brings in 75 percent of the income and the wife brings in 25 percent. The kids are ages 9 and 7. We are basically talking about your leave it to beaver situation.
One day dad comes home and notices something amiss. He finds mom has passed away from a stroke. What now? Dad suddenly is both the father and mother of the kids, but now has 25 percent less income to handle the situation with. Not only has his wife passed away suddenly, but the physical and time requirements of his life are about to change massively as well.
So, how have things changed? Well, consider a simple question. What is dad going to do with the kids when he goes to work? Who is going to take them to their after school events? Who is going to prepare meals and so on? What about doctor appointments? How about the laundry? Dad's day just got much busier.
The answer to all these problems is to bring in part time or full time help. There is a problem, however. The family has lost 25 percent of their income and is probably having problems meeting the bills as things stand. How can dad afford to bring in help? He can't unless there was a life insurance policy on mom that can be used to pay for it.
This example uses a nuclear family, but it could be any structure. The key is to understand that value is not just found in income, but in time as well. A stay at home spouse may earn little or no money, but they exert a significant amount of time and energy each day getting things done. What would it cost to hire someone to replace that for a year? How about for 15 years while kids grow up? That's a pretty significant amount of money and the reason why buying life insurance on a stay at home spouse is critical.
Picture our example family for the purposes of this article. We'll go with the classic nuclear family - a husband, wife and two kids. The husband brings in 75 percent of the income and the wife brings in 25 percent. The kids are ages 9 and 7. We are basically talking about your leave it to beaver situation.
One day dad comes home and notices something amiss. He finds mom has passed away from a stroke. What now? Dad suddenly is both the father and mother of the kids, but now has 25 percent less income to handle the situation with. Not only has his wife passed away suddenly, but the physical and time requirements of his life are about to change massively as well.
So, how have things changed? Well, consider a simple question. What is dad going to do with the kids when he goes to work? Who is going to take them to their after school events? Who is going to prepare meals and so on? What about doctor appointments? How about the laundry? Dad's day just got much busier.
The answer to all these problems is to bring in part time or full time help. There is a problem, however. The family has lost 25 percent of their income and is probably having problems meeting the bills as things stand. How can dad afford to bring in help? He can't unless there was a life insurance policy on mom that can be used to pay for it.
This example uses a nuclear family, but it could be any structure. The key is to understand that value is not just found in income, but in time as well. A stay at home spouse may earn little or no money, but they exert a significant amount of time and energy each day getting things done. What would it cost to hire someone to replace that for a year? How about for 15 years while kids grow up? That's a pretty significant amount of money and the reason why buying life insurance on a stay at home spouse is critical.