Do Stay‑at‑Home Parents Need Life Insurance?

Often, working parents buy life insurance to ensure their family will receive continued income should the unthinkable happens. But what if you’re a stay‑at‑home parent? If you don’t bring home a paycheck, do you still need life insurance in order to provide for your family?

The short answer is yes, you certainly do. Learn why, how to determine what you need, and other key factors stay‑at‑home parents should know.

Fact: Stay‑at‑Home Parents Have Big Jobs

On any given day, stay‑at‑home parents perform many indispensable jobs. They’re childcare providers. Chefs. Housekeepers. Chauffeurs. And more!

Now, what if something happens to a stay‑at‑home parent? Most likely, the surviving parent would need to hire help or reduce their work hours in order to fill that gaping hole. Either way, it would place tremendous financial strain on the family.

That’s where life insurance comes in. Life insurance can cover the cost of all these services, protecting the family’s budget and future.

Valuing a Stay‑at‑Home Parent’s Job

Stay‑at‑home parents may not earn a salary, but their work has great value—some of which is measurable. Here’s how to calculate it:

Determine how many hours you spend per day/week on each task (caregiver, chef, etc.)
Research the average hourly wage for each job in your local market
Multiply the hourly rate for each job by the time you spend on each
Tally the total—that’s how much it would cost to replace you!

Here’s an example. According to one U.S.‑based survey, the average stay‑at‑home parent works a staggering 106 hours per week—about 15 hours per day, seven day per week. Furthermore, their median annual salary for their labors (using pay rates from the U.S. Department of Labor) adds up to an impressive $184,820. That’s a fairly accurate estimate of what it would cost a surviving parent to fill that role for just one year.

Though it may be an emotionally difficult topic, that’s exactly why stay‑at‑home parents need life insurance.

Additional Factors to Consider

Once you believe that you need life insurance and know your value as a stay‑at‑a‑home parent, it’s time to talk to an insurance advisor—one who will help you choose the right type of life insurance and benefit amount.

In order to best guide you, they will likely ask you these questions:

How many children do you have?

The more children who need care, the more expensive childcare will be—something to factor in when determining a benefit amount.

What are your children’s current ages?

The younger your children are, the longer they’ll need care. Not only will you need more life insurance to pay for it, you’ll need a policy that remains in effect throughout their childhood. For example, term life insurance lasts for a specific term, while permanent life insurance lasts for life.

Are you planning to return to work in the future—and why?

Many stay‑at‑home parents plan to go back to work once their youngest child goes to school, with the goal of saving for college or retirement, etc. Knowing your long‑term financial goals will help you choose the right type of policy.

For example, whole and universal life insurance policies not only provide a death benefit, but accumulate cash value, which you can withdraw or borrow against to fund your financial goals.

Would you like leave your children a legacy?

Is your goal to not only to provide for your children’s immediate care, but leave them with an inheritance later? Planning such gifts will also impact the type of life insurance that’s best for you, as well as your benefit amount.

Key Takeaway

When you break it down, stay‑at‑home parents need life insurance just as much as their working counterparts. Talking to an experienced insurance advisor can help you make the best decision for you and your family.

At Pan‑American Life Insurance Group, we offer a range of quality life insurance solutions that are ideal for young families.

To learn more about solutions available to you,

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This article has been prepared for informational purposes only, and does not constitute personal advice. Consult with your own financial and tax advisor with respect to your personal situation. Some products may not be available in every jurisdiction where Pan‑American Life is licensed to do business. All products are subject to exclusions and other applicable terms and conditions.