Myths Debunked: Life Insurance and the Stay-at-Home Parent
You stay at home and take care of the kids. Why do you need life insurance? It costs a lot of money, if you die, there’s no real income to replace, and your spouse pays all of the bills now already. What possible benefit is there to buying more insurance? You might be surprised.
Why Stay-At-Home Parents Need Life Insurance
Just because you stay at home, doesn’t mean you don’t need life insurance. On the contrary, staying at home is sort of like having a full-time job. If you’re not there, who will take care of the children? Who will clean the house? Who will do the cooking? Who will run the errands? Who will do the grocery shopping? The laundry? Who will drive the kids to practices, events, and friends’ homes? What about caring for ageing parents?
You think your spouse could do all of that when you’re gone? If that were true, why isn’t he or she doing that right now? Why do you spend all day doing all of those things if they’re so easy that anyone could do them?
The reality is that, if you die unexpectedly, your spouse will most likely have to pay for hired help. He can’t do everything himself or he’d be doing it now. Or, you’d be working and you’d both share the responsibilities. But that’s not what’s happening now. You need life insurance to protect the lifestyle that your family has right now instead of relying on some hypothetical lifestyle that doesn’t actually exist.
How Much Life Insurance Should You Buy?
Life insurance is a tricky business. On the one hand, agents are always pushing you to buy more of it. On the other, you can only afford so much, and you’re not sure that you actually need as much as the agent says you do.
A simple way to calculate your true insurance needs is to add up all of your financial obligations – credit card balances, mortgage balances, medical bills, and even future obligations like college tuition. The total you come up with is the amount of life insurance death benefit you need today.
Of course, those debts change over time, which is why it’s important to meet with a life insurance broker or agent every year to reassess your insurance needs. That doesn’t mean you must always purchase more life insurance. In some cases, you might need less.
How To Talk To A Life Insurance Agent
Insurance agents don’t always try to sell you more insurance – at least overtly. The home office sales illustration software is designed to sell you more, whether the agent is conscious of it or not. What you want to do is buy insurance, not have it sold to you.
Have a general idea of the type of insurance you want to buy – term, whole life, or universal life. Then, have a general idea of how much death benefit you need. Approach an agent with this information. Be proactive, and you’ll buy just as much as you need, and no more.
Andrew Harvey is a father of five who runs a small home-based business. He likes to help others starting out by posting his experiences on various Internet websites.