Do Both Parents Need Life Insurance?
Life insurance is about protecting family members from financial struggle. Typically, a working parent will have a policy to replace their lost income, providing support to the family if they should die. So, does a stay-at-home parent, who is not earning income, really need life insurance?
Your goal is to protect your children. You want to ensure they can remain in their home and neighbourhood, in the same schools, and maintain the standard of living they currently know. The parent with the salary provides the financial means, which clearly must be secured if that parent dies. However, an nonsalaried parent provides valuable care to the family through the many tasks they perform.
Unpaid work contributes to your family’s lifestyle. This parent saves the family money every month on daycare, shopping, housekeeping and transportation. Should the stay-at-home parent die unexpectedly, without life insurance, the surviving parent must find the time and money to do everything their spouse managed. In addition to their own grieving.
The payout, or death benefit, from a life insurance policy can help the working parent. It provides options such as taking time off from their job, to provide emotional support for children and themselves, without worrying about how bills are going to be paid.
What about those bills? Should one parent die, they potentially leave their partner with financial obligations–– a mortgage, car loans or college tuition bills, for example. If both have life insurance policies, these expenses are covered; plus, the second policy will provide loved ones with financial support when the second parent passes away.
Through a frank discussion with both of you, your Financial Advisor can recommend a policy that fits your family’s needs. Term insurance provides coverage over a fixed period of time (perhaps until your children have finished their education). Whole Life Insurance offers stable, continued protection throughout your life together.
Some term policies can be converted later on into a whole life policy. For instance, when a growing family is able to afford the typically higher cost.
Get this planned sooner rather than later. Generally, the younger you are when you purchase life insurance, the less it costs.
Life insurance for both parents helps you protect what matters most. Sit down with your Financial Advisor to discuss the best way to achieve this.