For the first few years after I stopped working, we had a life insurance policy on Mike and nothing on me. It seemed logical at the time. He earns the money; if something happened to him, we'd lose the income. If something happened to me, well, it would be terrible, but the bills would still get paid.
That logic fell apart one evening last winter when Mike had to take Rosie to her checkup and get Owen to practice while I was down with the flu. By eight o'clock he looked at me and asked, only half joking, "How do you do this every single day?" A week later we sat down and actually priced it out.
What a stay-at-home parent's work actually costs to replace
A stay-at-home parent doesn't bring in a paycheck, but the work doesn't disappear if they're gone. Someone would have to do it, and in most cases that someone would have to be paid. We made a rough list of what Mike would need to cover if I weren't here:
- Childcare: Full-time care for Rosie, plus before- and after-school care and summer care for the older two. In our area, that added up to roughly $1,400 to $1,800 a month, depending on the season.
- Help at home: Some cleaning, meals, and laundry help, or at the very least a lot more takeout.
- Lost work time: Mike's plant job has fixed shifts. Sick kids, school events, and appointments would mean unpaid time off or cutting hours.
- Final expenses: A funeral, which on its own can cost many thousands of dollars.
When we multiplied the childcare numbers out until Rosie finished elementary school, the total was sobering. It was a lot more than we could absorb on one income without falling apart financially, on top of everything else.
Why we went with term
I'm not an insurance professional, and I won't tell anyone what to buy. But I did spend years at a community bank, and I've always been the one in our house who reads the fine print. Here's what I learned while shopping, in plain terms.
Term vs. permanent, briefly
Term life insurance covers you for a set period, commonly 10, 20, or 30 years. If you die during that term, it pays out. If you don't, the policy ends, and there's no cash value. Permanent policies, like whole life, last for your entire life and build cash value, but the premiums are typically many times higher for the same amount of coverage.
For us, the need is tied to a specific window: the years when the kids are young and at home. Once Rosie is grown, the math changes. That made term the obvious fit for our situation.
How we picked a length and amount
We chose a 20-year term, which takes Rosie past high school graduation. For the amount, we added up the rough cost of childcare and help at home over those years, plus a cushion for final expenses, and rounded to a number that felt reasonable against the premiums. We settled on $350,000.
What the process was like
- We collected quotes from three different insurers. For the same coverage, the monthly prices were within a few dollars of each other, though one company required a medical exam and another didn't.
- I filled out an application online and then did a phone interview covering my health history, medications, and family history.
- A nurse came to our house for a short exam: height, weight, blood pressure, and a blood and urine sample. It took about twenty minutes, and Rosie supervised.
- About five weeks later, the policy was approved at the rate we'd been quoted.
The premium comes out to about $21 a month. For a healthy nonsmoker in her thirties, that's typical from what I saw, though prices depend heavily on age and health. It's less than we spend on pizza night.
A few things I'd tell a friend
- Check what's already in place. Many employers offer group life insurance, often a multiple of salary. Mike has some through the plant, but that coverage typically ends if you leave the job, which is one reason we don't count on it alone.
- Name your beneficiaries carefully. Minor children generally can't receive a payout directly, so it's worth learning how that works in your state.
- Don't wait for a scare. Premiums tend to go up with age and any new health issue.
Every family's situation is different, and if you're unsure, a licensed professional can walk you through the options. For us, $21 a month buys the knowledge that Mike wouldn't have to choose between his job and our kids. We both sleep a little better for it.
