Should a Non-Working Parent Have Life Insurance?

Being a stay at home parent is a difficult job that enriches your child’s life and your home, but you do not get paid directly for the work you do. Because of this, many parents who don’t work outside the home assume they don’t need life insurance. Life insurance, which is primarily used to support dependents after a wage-earner has passed away, may seem like an unnecessary expense for a stay-at-home parent but consider this, how much would it cost to pay someone to do your job?

Would your spouse need to hire a nanny? A housecleaner? A bookkeeper? After school care? More meals outside the home? While basic childcare alone would be a major expense to account for, a stay at home parent is also likely contributing to these other roles and would be difficult and expensive to replace. When you consider all these potential contributions to the household, the question is not if a non-working parent should have life insurance, but how much should they have?

Need even more proof why a stay at home parent should have life insurance? Let’s look at more reasons why insurance is a good idea.

Child Daycare Costs Between $4,000 and $22,000/Per Year

According to, daycare alone could be thousands of dollars each year and the younger your children are, the greater the expense. And, if you have more than one child, live in certain areas, or have a child with special needs this could be even more.

Because children will eventually age out of the need for childcare, Term Life Insurance is a great option to cover this concern. Term Life is cost-effective and can be set for a certain amount of time like 10 years which is often the perfect timeline to cover childcare concerns.

Household Contributions Outside of Childcare

While caring for a child can certainly be a fulltime job, most stay at home parents serve multiple functions. They are often the primary person responsible for house care, paying bills, cooking and a wide range of other responsibilities. If any of these functions will need to be replaced by a professional, life insurance should be setup to cover those costs.

To Cover Debt, Funeral and Other Expenses

When a loved one passes, it is an extremely emotional time, and this is only made worse when financial matters must still be dealt with. To help make the grieving process and the financial aftermath of a death less traumatizing for a surviving spouse and children, life insurance is critical.

For this purpose, life insurance should at least be able to cover funeral expenses which, on average, can be up to $10,000. Also consider the following debt and expenses when determining how much life insurance you need as a stay at home parent:

  • Credit card debt
  • Student loan debt
  • Funeral expenses
  • Mortgage and car loans

Permanent Life Insurance Considerations

Most of the above concerns can be handled with Term Life Insurance, but Permanent Life Insurance can also serve a purpose for a stay at home parent. Permanent Life Insurance is, as the name suggests, permanent – this means you remain eligible for it no matter how your life or health changes. Getting this type of insurance now will ensure you are covered even if you face major health changes later.  

Additionally, this type of insurance allows you to build cash value. This means you can potentially borrow from the policy before the policyholder passes away, making it a good way to cover unexpected expenses.

Choosing Your Life Insurance

To ensure you get the best possible coverage for you and your family, Arbor Creek Financial is here to answer all your questions about life insurance for stay at home parents. Our knowledgeable agents are available to assess your situation and make recommendations based on your individual goals. For more information, contact Arbor Creek today.