Do Stay-at-Home Parents Need Life Insurance?

When buying life insurance, many experts recommend purchasing coverage equal to 10 times income. But, what about people who don't earn income? Since they don't have a salary that others are depending on, it may seem like there's no need to buy this kind of insurance coverage. 

For stay-at-home parents, the focus on income replacement may make it seem as if life insurance isn't necessary to protect loved ones in case of an untimely death. But is that the case, or should a parent who stays at home to take care of their kids get covered? 

Is life insurance needed for stay-at-home parents?

While stay-at-home parents may not get a paycheck deposited into their bank account, they are contributing services that provide a tremendous value to the family. Those services are not free, even though parents don't get a paycheck for offering them. 

When you factor in everything that a stay-at-home parent does, including child care, housekeeping, cooking, transportation, laundry, and much more, the value of the service they provide is so high that, if they were paid, their average annual salary would be $184,820. 

That's well above the national average salary in the United States. The median household (not individual) income was $74,580 in 2022, while the average household income was $105,555. So, if stay-at-home parents were paid, they'd be making a much higher income than the typical worker -- and the value of the services they're providing may exceed what their spouse earns.

If a stay-at-home parent passed away, someone would still need to perform all of the tasks they were doing. The surviving parent probably couldn't do it on their own because they'd still have to work to earn a living -- so there would likely need to be a lot of paid help that wasn't necessary before.

Without life insurance, it's unlikely that a family would be able to start paying for the costs of all the services they need -- at least not without major financial hardship and a serious disruption to their standard of living. Since they'd be left in bad shape without a lot of extra money coming in to pay for professional help, this is the exact type of situation where life insurance is necessary. 

And the reality is, it's not just stay-at-home parents who need life insurance despite not having an income. Anyone who provides valuable services for others, such as a caregiver for elderly parents or a disabled spouse, should make sure they have enough life insurance coverage in place for those who depend on them to pay to replace the services they were previously offering.  

Get covered ASAP to avoid leaving loved ones in bad shape

While it may not seem like a priority to get life insurance for someone without income, no one can predict when tragedy will strike. If someone passes away and doesn't have any coverage, it will be too late and their family will be left without the support services they were offering. 

Caregivers should buy life insurance ASAP. They should start getting quotes from life insurance companies right now to find a policy that would ensure their surviving loved ones are provided for. Most insurers offer the ability to get policy prices online, so check how much coverage would be from several different insurers for a policy with at least $250,000 to $400,000 in coverage, and consider moving forward with buying an affordable life insurance plan.