What is a stay-at-home-parent worth?

Some say being a stay-at-home-parent is the worst-paying full-time gig out there. That could be true. From boosting children’s grades to helping save on childcare costs to keeping the home in working order—you could argue that those who stay home are the ones who truly run the world (along with girls, of course). So what if you were to put a price tag on some of these tasks? To truly understand the financial contributions of stay-at-home parents, we put together the below graphic that shows the national average hourly rate of some of the “simple” tasks they do day in and day out:

The average worth of typical day-to-day tasks

Ok, you get the idea.

While these tasks don’t reflect all stay-at-home-parents’ experiences, they do represent just a teeny fraction of the work that goes into this under-estimated role. Stay-at-home parents do a lot of things which, if outsourced, would get extremely pricey. And it’s not just the traditional stuff—like playing nanny, nurse, and teacher—that modern mamas and papas are working hard at. From moonlighting as social media safety officers for their young ones to providing tech support and more—stay-at-home parents are more like quadruple threats nowadays. How’s that for earning potential?

So imagine adding up all the little things and then adjusting those costs for location and hours worked (usually 24 hours since they’re always on call). It gets to be expensive. Finding someone to do all those things would cost an arm, a leg, and probably a full torso even.

Not to get all depressing or dark, but have you ever wondered how these roles would be fulfilled if the stay-at-home partner was no longer around? Those things would still need to get done, regardless of work commitments. It’s a difficult question, but there is an answer that could help with the financial side of things: joint life insurance.

What are the insurance options for families with a stay-at-home parent?

If you’re in a relationship and are looking to get life insurance, you have two options: 1) you can both buy separate policies, or 2) you can share a joint life insurance policy. Yep, although not many people know about it, there is such a thing as a shared life insurance policy.

Joint life insurance allows two people to share one life insurance plan. It’s also usually cheaper than taking out two separate policies. One simple reason is that it can be less expensive for an insurer to underwrite two people at the same time (if they’re both healthy).

Why do stay-at-home parents need joint life insurance?

So, traditionally, life insurance plans are set up to cover the breadwinner, since the financial shockwaves of losing the family’s main income earner can be serious for those left behind. But as we mentioned earlier, the consequences of the stay-at-home partner passing away can be just as serious —even if they don’t earn much or have no income at all. For example, did you know that the average cost of a full-time childcare program in the U.S. is roughly $16,000 a year? And that’s just childcare. What about everything else?

If you’re the current breadwinner of your home, joint life insurance could give you incomparable peace of mind. Here a just a few examples of how this kind of joint policy could put both you and your spouse at ease:

• You’d be able to afford to take off of work to be with your kids and help them through this difficult time.
• You wouldn’t have to rely on family and friends for childcare.
• You’d be able to pay any medical bills that may have come from your spouse being ill.
• And for your spouse, they’d have the comfort of knowing that things like college tuition and weddings are all taken care of.

It’s not an exaggeration to say that any family would be massively impacted, both practically and financially, if the stay-at-home parent was not around. That’s why it’s important to consider an insurance plan that covers both you and your partner. With that said, while this type of insurance doesn’t say you have to be in a romantic entanglement, those that get it usually are in a relationship.

When is single life insurance better than joint life insurance?

Ok, if you’ve gotten this far, we assume that you know what joint life insurance is (or hopefully have a vague idea at this point). But what about single life insurance? And how do you know when you should get single vs. joint life insurance?

It’s simple: single life insurance covers one person, hence the term “single”; joint life insurance covers two lives, hence “joint.”

The single option is best if there’s a difference in the level of coverage either of you need. Or if there’s a difference in how long you want to be covered for. Taking out two separate policies lets you insure each person for different amounts.—so you could insure the breadwinner for more than the stay-at-home parent. Overall, plans like this can be customized to your individual needs. There’s also the added benefit of multiple payouts.

On the other hand, joint life policies are good for when you and your partner want the same coverage level for the same amount of time. For example, you want to cover the loss of the breadwinner’s income or you want to cover a joint mortgage. There’s also only one payout.

When in doubt, remember that joint life insurance may not be for you if you and your spouse have different needs protection-wise.

What’s first-to-die life insurance and second-to-die life insurance?

Joint life policies are always either whole life or term life insurance policies.

Joint life insurance also comes in two flavors:

• First-to-die life insurance: If your spouse dies first, you, as the “surviving partner” (aka the beneficiary) will get the death payout. This primary goal of this kind of joint life insurance is similar to that of single life insurance: to replace the lost income (or equivalent value) of the deceased spouse or partner. The money from the policy can be used to pay for debts, mortgage, childcare, home care, and more—guaranteeing your kids, home and life will be protected.
• Second-to-die life insurance: With this kind, the death benefit is paid when the last surviving person named on the plan dies. You’re probably wondering, “what’s the point in that?” Well, it makes sense for people that want to leave an inheritance behind or those that wish to pay off any debts, so their next of kin aren’t burdened with them. You can usually get qualified for this kind of policy more easily since both of you need to die before it’s paid out (so, obviously, health doesn’t matter as much).

In short, first-to-die life insurance helps the surviving person of the insured couple, while second-to-die is purely for the beneficiaries (the insured couple will never see this money). If you’re considering joint life insurance, simply think what your goals are for the money and then choose the policy type from there.

The downsides of joint life insurance

Since we’ve been singing the praises of joint life insurance, it’s only fair that we mention a couple of drawbacks—just so that you can make an informed decision.

So, for one, a joint policy can sometimes mean waiting decades before the benefit is paid; this is especially true if you’ve opted for a second-to-die policy. You literally have to be dead for anyone to see the benefits. For those that opt for a first-to-die life insurance policy, if your spouse dies, you’ll need to take out another policy on yourself (if you still want life insurance coverage). A new policy will inevitably come at a higher rate due to any health issues you may have at an older age.

Secondly, a break-up or divorce can get further complicated with a joint life policy. Relationship breakdowns are messy enough without throwing a life insurance policy in the mix. So save yourself some drama and before saying “I do” to a joint policy, check if your insurer can add a rider that’ll allow it to be evenly split if there’s a break-up.

Finally, there’s always the scary scenario where both policy-holders aka you and your spouse die at the same time. It’s a scary thought but one to be considered nonetheless. In that case, your loved ones would only get one payout and not two. Of course, a simple solution here would be to buy a bigger policy.

While none of these are huge drawbacks, they are things to consider when shopping around for this type of insurance.

In conclusion

There’s a common misconception that the person who brings home the bacon is the one that needs to be protected. But life insurance doesn’t just have to be a safety net for your loved ones in case you die. It can also be about how you’ll live in case your circumstances change. Yeah, financially protecting those who depend on your income is important. But, stay-at-home parents make priceless contributions that should be protected with life cover too.

It’s important to plan for how you’d cope if your spouse or the non-primary breadwinner of your household passed away. In most cases, you and your family could be protected, should the worst happen, for the price of a daily Starbucks coffee. It’s a small price to pay for a lot of peace of mind.

And sure, you might not have kids yet, that’s fair. But you might one of these days. Also, even if childcare is not a concern right now, and your partner is not at home but actually working, joint life insurance could help with that loss of dual income if something happens to either one of you.

When it comes down to it, no one can EVER replace a mom, dad, or life partner. Whether the stay-at-home parent is just that or they work part-time or full-time, the role they play is truly priceless and unique. But by planning for the worst, you can give yourselves peace of mind in the moment and alleviate any financial burden at a time when you may be struggling emotionally.

*Hourly rate sources:

Chef: https://www.indeed.com/career-advice/pay-salary/how-much-money-does-chefs-make

Cleaner: https://www.indeed.com/career/cleaner/salaries

Therapist: https://www.indeed.com/career/therapist/salaries

Nanny: https://www.indeed.com/career/babysitter%2Fnanny/salaries

Cyber-safety cop: https://www.indeed.com/salaries/cyber-security-Salaries