Many young families, especially those where only one spouse is the breadwinner, keep only a minimal amount of life insurance. After all, it’s expensive, and there are so many other bills to pay and more immediate needs to take care of.
Particularly in homes where there’s a stay-at-home mom or dad, it’s easy to have no life insurance or to keep just enough to cover daycare expenses or to hire a nanny in case the unthinkable happens.
Even families who take into account the dollar value of the day-to-day childrearing tasks that each parent handles, and plan this amount into their life insurance calculations, fail to consider something that may be far more important.
Think about this: what would really happen in your home if you or your spouse were no longer there? If your kids are still young, would they actually be okay with hired professionals taking care of their basic needs while their remaining parent went to work as usual?
For many families, the answer to this question is an emphatic, “No!” The emotional impact of the loss of a parent can take years to recover from. This is why many parents buy enough life insurance so that, in the event one of them dies unexpectedly, the surviving parent will be free to choose whether to continue working or to be home with the children. So, if the kids need undivided attention, the surviving spouse is not under any financial pressure to be away at work.
When you’re deciding how much life insurance you need, it pays to think about how much it will cost to meet your children’s emotional needs as well as their physical needs.