From Life Happens:
Whether you’ve always stayed home with the kids or you’ve recently transitioned to the important role of stay-at-home parent, you probably know how vital your work is to the health and happiness of your family. So, what would happen if you could no longer be there for them in the way you are now?
One of the most comprehensive planning tools for keeping your kids secure is life insurance. It’s designed to be purchased now while you have some control over things and will kick in after you’re gone. Life insurance policies offer many benefits to your family, including a tax-free death benefit, a sense of financial and emotional security, and future insurability when your health may not be as certain.
1. Put yourself in your family’s shoes.
The first step of the process is often the most difficult—because no one likes to think about what life would be like if you weren’t around for your kids. Getting past the pain and discomfort is important, however, because you can’t truly explore all the options for life insurance until you’ve tried to imagine what a day or even a year in your family’s life would be like without you.
What needs will they have to meet? It probably goes beyond housework and cooking. From carpooling to tutoring to possibly even mental health services, the goods and services you provide to your family as a stay-at-home parent are valuable—and your family’s needs may be even greater in the future than they are now. Losing a loved one is disruptive and may require additional resources to help your family achieve healing and wholeness after you’re gone.
2. List out what’s needed—and what it costs.
After you’ve gone through the work of putting yourself in your family’s shoes, you have a better idea of the things they’ll need to pay for in your absence. You may have older kids and not believe they need certain services, but some extra help while they adjust may still be a good idea. Make a list of the items that will need to be initially purchased after you’re gone, along with ongoing needs the kids will have throughout their childhoods. Try your best to price these at a per-year price tag, and add extra each year for inflation.
Be sure to include any costs that your partner or other loved ones in the home may incur; you may even consider how aging parents or those who rely on you in other ways may need support, as well.
And don’t forget about funeral services, since these costs can run in the thousands!
It can be hard to predict all the costs, but a Life Insurance Needs Calculator helps simplify the process.
3. Consider ways to better your family.
While no one considers death to be a good thing, life insurance can be used to help your family move forward in some areas of their lives, even as they deal with your passing. Whether it’s paying off credit card debt or putting aside some college funds for the kids down the road, now is the time to think of your family’s financial responsibilities and put a plan in place for clearing these obstacles, if possible.
If your family lives paycheck-to-paycheck, you may not have much left over at the end of the month to put toward savings. Consider adding some extra coverage to your life insurance to help your family with an emergency fund; the larger life insurance payment could put them in a better financial position.
4. Research your options.
While it’s true that a good life insurance agent can walk you through everything you need to know about the policies they offer, doing a little research ahead of time can only help. You can get familiar with the terminology used when talking about policies, as well as get an idea of the different product types that are available. If nothing else, looking through life insurance articles and guides can inspire questions that you can write down to ask an agent when you meet.
If you don’t have a life insurance agent yet, this tool can get you connected to those licensed in your area and help you choose between them.
5. Prioritize the purchase.
At this point, you’ve done much of the hard work, and you’ve probably even talked to your family about what’s needed in the event you’re not around anymore. With that out of the way, you’re in a great position to meet with a qualified agent and get your insurance policy. Pricing tends to be better when you’re younger and in good health, so there’s an incentive to make your mind up and buy a policy sooner than later.
If, as you age, you decide you need more coverage or a different coverage type, that’s OK. Your agent can talk to you about the changes in your family to ensure you always have the right amount of coverage to help them succeed. Whether you add a new baby to the family or you want to increase your policy coverage to account for inflation, your insurance agent can walk you through what’s needed to always have adequate coverage for every new season in your family’s life.
