Since I’m off in Nashville this week, some of my incredible Bloggers Helping Bloggers participants have agreed to fill in for me. Today’s post is from one of our mentors, Jeff Rose who is a certified financial planner and an Iraqi combat veteran. He runs the blogs GoodFinancialCents.com and LifeInsurancebyJeff.com.
The job of a stay at home mother is one that no salary amount could compensate for. From parenting to cooking, the duties are endless and determining the right amount of insurance coverage in the event that something happens to this person is key.
If you came to my house, it would be no different. Aside from the duties listed above, my wife is also a resident nurse, tutor, sports equipment manager, UFC referee (we do have have 3 boys 🙂 ), and much, much more.
Quick math shows that the typical $25,000-$50,000 policy would not be enough to even cover the lost wages of the breadwinner of the family. Heck, even a $250k-$500k policy might not be enough.
Adding the monetary value of some of the tasks that a mom performs on a daily basis brings us even further away from the range of a standard policy. With this in mind, it comes as no surprise that most Americans to not have enough life insurance coverage.
A 2010 LIMRA study shows that 30% of American household have no life insurance at all and another 58 million are not insured enough.
Most that don’t have life insurance claim that it “cost too much”.
Really? Do these people not realize how cheap life insurance really is?
It is difficult to plan for an unfortunate event to happen but it should be looked at as a means to protect your family in the event that you cannot anymore. Of the women in the workforce, their life insurance coverage is far exceeded by their male counterparts. For stay at home moms, the amount is even less.
How Much is Momma Worth?
According to a study performed by Salary.com of 8,000 stay at home moms, it was determined that their value is equivalent to a salary of $112,962. Dave Ramsey came in with an estimate closer to $300,000-$400,000. I’m pretty sure why wife’s estimate is 3-4 times of what Dave’s is. 😉 (Jana’s note: trying to put a salary on the job of “mom” is one of my pet peeves, but I like Jeff so I’ll let this slide).
Regardless of where you value yourself as a stay at home mom, it is important to consider every task you perform as well as other considerations such as the cost of child care. The tasks that a stay at home mom performs have real economic value which is why life insurance for stay at home mom is so crucial.
Who’s Watching the Kids
In addition to the various duties of a stay at home mom, the duty of watching after children is by far one of the most expensive to pay someone else to do. Child care costs are extraordinarily high as is, but depending on where you live, they can eat a large portion of your paycheck each month.
In 2010, the average cost of care for an infant in Mississippi was $4,650. In the District of Columbia this cost was $18,200. We have 3 boys with an adoption pending. Imagine the cost for our family. <gulp> (Jana’s note: Where I live, it costs roughly $800/month for an infant. By the time my daughter stopped attending daycare last year, we paid $660. And, now that she’s in school, before and after care, we’d need to pay about $300/month. And let’s not even discuss the wallet abuse that is summer camp. When I talk about going back to “normal” employment, we often come back to this point).
It is important to take location into account when determining just how much life insurance you will need.
Other Important Factors For Life Insurance
Not only does life insurance help to pay for some of the duties that a stay at home mom performs, but it is also essential for funeral arrangements as well as children’s college tuition. Losing a loved is emotionally tough. It doesn’t have to be financially tough, too.
Even though I’m the bread winner in our household, having to raise my boys without my wife is something I don’t even want to ponder. She does so much for our family and if I had to replace her, I would spare no expense to make sure they had the best care until they were old enough to attend school.
Where Do You Buy Life Insurance?
In years past, the common thing to do was to call your local life insurance agent, have them come to your kitchen table, and buy your policy that way. While that still occurs, it’s much more convenient nowadays to hop onto Google and do your life insurance shopping that way. By Googling “term life insurance quotes“, you’ll find over 41 million results! Granted there not all good; but it’s a good indication on easy it is to shop online.
If you do buy life insurance online, be sure to identify a true independent agent that can work with dozens of different carriers. Many local independent agents and online sites claim to be independent, which they kinda are, BUT they may only work with 10 different carriers. In comparison, my agency works with over 60 different carriers which increases the likelihood of you truly getting the lowest rate. There are many other independent agents that do the same.
How do you find out? Just ask. If you get an agent on the phone, ask them how many different carriers they work with.
With all of this in mind, it is difficult to argue that stay at home moms do not need life insurance. Knowing that your family will be well provided for in the event that something unfortunate happens gives you peace of mind which to many is considered invaluable.
Both my wife and I have insurance because if either one of us dies prematurely, it will impact the other financially.
krantcents recently posted…Xanatos Gambit!
Great points. We don’t have kids yet, but I do have a minimal life insurance policy through my work. When we do have kids we’ll both likely get much bigger policies.
KK @ Student Debt Survivor recently posted…Top 10 Reasons Friends With Debt Are No Fun!
Considering the median wage in the United States is about $50,000 to $60,000, I think Salary.com’s research estimating a mom’s salary at more than $110,000 is not under-appreciating moms. That’s a great salary – one most people will never achieve in their careers, so it’s kind of a compliment.
Christine recently posted…GoDaddy Coupons, Coupon Codes
I have a decent city job and it came with the benefit of both free (one years salary) and discounted life insurance that I pay a little out of each check for. It would be nice if everyone had the benefit of being able to purchase life insurance through their work.
zimmy@moneyandpotatoes.com recently posted…The Potato Sack #3 : Toilet Paper Placement and Blog Roundup
You just reminded me to check my contract to see if I get any sort of cover. We don’t naturally get it with every job here in the UK.
Before my wife and I had our first child, I was thinking about getting a policy for her with a lower face amount. Just enough to cover the mortgage.
After having our first child, I realized just how wrong I was. The value she brings to our home is tremendous even though she does not bring in a physical pay check!
Just the thought of trying to afford daycare and house keeper while I work two jobs makes my head spin. Since then, I have increased her coverage amount drastically, because there is no way I could afford to do without her!
Tyler recently posted…The Importance of Purchasing Life Insurance
The fact remains is that many moms either don’t have adequate life insurance coverage on them or, even worse, don’t have any life insurance coverage at all!