How much coverage to buy
A common starting point is 10 to 15 times the working parent's annual income. Add the projected cost of childcare, the remaining mortgage balance, future college funding, and any debts. Subtract existing savings and employer-provided coverage to find the net amount of new insurance to buy.
Why stay-at-home parents need coverage too
A stay-at-home parent provides labor — childcare, transportation, meal preparation, household management — that would cost tens of thousands of dollars a year to replace. A modest term policy on the stay-at-home parent ensures the surviving parent can hire help without financial stress.
Why term is usually the answer
A 20- or 30-year term policy bridges the years your children depend on you. Once they are independent and your savings have grown, the need for life insurance often disappears, which is exactly what term is designed for.
Key takeaways
- Aim for 10 to 15 times income, plus debts and education costs.
- Insure stay-at-home parents to cover replacement labor.
- Term insurance is usually the most cost-effective choice.
- Lock in coverage while you are young and healthy — premiums only rise.
This article is for general educational purposes and is not legal, financial, or insurance advice. Consult a licensed professional for decisions specific to your situation.