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Life Insurance for Stay-at-Home Parents

Updated June 2, 2019 . AmFam Team

Stay-at-home moms and dads do amazing, valuable work for their families, and they need life insurance just as much as their working counterparts.

Stay-at-home moms and dads do amazing work for their families, and if you or your partner is a stay-at-home parent, then you understand just how important that job is. In a recent Salary.com study, it estimates the stay-at-home parent’s annual salary is equivalent to about $178,000, and that’s including all the overtime. Many people assume that because this role is unpaid, it’s not necessary for a stay-at-home parent to have life insurance. But when you consider the value of their work at home, life insurance makes a lot of sense for a stay-at-home parent.

What’s the Value of a Stay-at-Home Parent?

From boosting your children’s grades to saving on childcare costs, there are many impacts of a stay-at-home parent’s work. That’s why it’s important to consider the monetary value of their contribution when deciding if you need life insurance.

To determine the monetary value of a stay-at-home parent’s contribution, you’ll want to assign a value to their services. Without your partner at home, how much would childcare cost? Per child? How much time would you need to spend preparing meals, running errands or doing chores like laundry and dishwashing? Add in all the nights and weekends parents put in, and you’ve got some serious overtime.

How Much Life Insurance Does a Stay-at-Home Parent Need?

Many insurance experts suggest having between five and ten times your annual income as your coverage amount. Consider things like how much you have left on your mortgage or how old your kids are. If you have a lot of debt or your kids are relatively young, a higher coverage amount might make sense to protect your family financially if you were to pass away. You’ll also want to consider your family’s lifestyle. Include in your calculations how much you’ll need to help maintain the quality of life your family has.


For a stay-at-home mom or dad, however, the cost of a $1 million policy might be a bit steep. So if that doesn’t fit into your budget right now, that’s okay. Even a $10,000 policy can help protect your family’s financial future.

What Type of Life Insurance Should a Stay-at-Home Parent Get?

While there are several different kinds of life insurance, the two most commonly chosen types are term life insurance and whole life insurance.

Term life insurance is usually the least expensive option and can last long enough for your kids to get through college and then some. Term policies are temporary, they end after a set amount of time, however, so if you want coverage beyond that, or the ability to build cash value, a whole life insurance policy might be right for you.

Whole life insurance can be more expensive, but it does provide permanent protection and offers a few more benefits than term life does. This type of policy builds cash value and gives you the ability to take a loan against your policy*.

Policies tend to be less expensive the younger and healthier you are, so the sooner you get life insurance, the better.

Get a Life Insurance Quote

Ready to start shopping for life insurance for the stay-at-home parent in your family? Connect with an American Family Insurance agent (Opens in a new tab) to get started today! They’ll answer any questions you have about life insurance and help you find the right coverage to financially protect your loved ones.

*Any loans taken from your life insurance policy will accrue interest. Any outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim. If the loan balance grows too large for the cash value to support it, the policy could terminate.

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    Should I Purchase Permanent Children's Life Insurance?

    If you’re purchasing life insurance on a child, most people select permanent life insurance since it is built to last the child’s entire life. A permanent life insurance policy provides not only a death benefit, but, as mentioned before, the policy also has living benefits, like the ability to accumulate cash value.

    Purchasing life insurance can be a practical and simple way to help protect your loved ones’ dreams. Check out American Family Life Insurance Company’s DreamSecure Children’s Whole Life permanent life insurance policy to learn more. Or you can also check in with an agent — they’ll be able to answer any questions you may have about children’s life insurance options through American Family Life Insurance Company.

    This is a brief description of coverage and is subject to policy and/or rider terms and conditions which may vary by state. Fixed and guaranteed premiums are statements about the policy as determined at issue, and any changes made to a policy may affect the premium and are subject to our underwriting rules. The words lifetime, lifelong and permanent are subject to policy terms and conditions. DreamSecure Whole Life Insurance policies mature at age 121. Please check with an American Family agent for details on coverages and restrictions.

    *Any loans taken from your life insurance policy will accrue interest. An outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or from the cash value if surrendered. If the loan balance grows too large for the cash value to support it, the policy could terminate.

    Policy Forms: ICC17-223 WL, Policy Form L-223 (ND) WL, Policy Form L-223 WL, Policy Form ICC17-224 WL, Policy Form L-224 (ND) WL, Policy Form L-224 WL

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    You can buy an annuity by giving your insurance company either a single lump sum or making payments over time. The insurance company then invests your money — referred to as a premium or purchase payment — in different ways depending on the type of annuity you select.

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    Life insurance and annuities work in tandem to protect a future for yourself and those you care for. Now that you have a high-level overview, discuss with your agent how these options fit your needs.


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