Many families may believe that nonearning spouse does not require life insurance protection.While fact is that their surviving working spouse feel difficult to manage financial affairs.
Think about a family with two young children. Mom stays home to look after their children. It is very difficult to put value on the amount of work ladies do all day when staying home.
A 2011 Salary.com survey determined the average stay-at home mom “earns” $115,000 a year.
Each week she works as:
- A DAYCARE TEACHER
- HOUSEHOLD CEO
- A PSYCHOLOGIST
- A CHEF
- A HOUSEKEEPER
- DOING LAUNDRY
- A PC-OR-MAC OPERATOR
- A FACILITIES MANAGER
- A JANITOR
- A CHAUFFEUR
96.6 hours per week
This is an eye opener. Lots of time young women think that they need life insurance only for 15 to 20 years. In most cases if you talk to women after 20 years they want to leave money for their children regardless of their age.
Therefore having some permanent life insurance at young age will be a good idea in addition to term insurance.
I will be glad to help you to complete insurance need analysis to ascertain the type and amount of insurance required in your personal circumstances and budget.
Many husbands and wives who don’t earn a paycheque think insurance is a waste of money. Yet if they die, their working spouses will be scrambling to cover funeral costs, not to mention many new expenses.
Your job is to show them the value of what they do. I ask stay-at-home clients to estimate what they think they should earn an hour. They usually guess low, and think a $100,000 life insurance policy is enough. It’s not—$1 million is more realistic.
To show why, I ask what they accomplish in a typical week—a day alone isn’t representative. And once they realize the scope, they see their initial estimate was too conservative.
I also explain $100,000 invested at today’s low return rates won’t last long, especially when it has to fund all the jobs they do.
Read: Tomorrow’s parents
Once they’re on board with the concept of life insurance, discuss the type and duration. A lot of non-working spouses say, “I only need it for the next 20 years. I can’t see needing it after my kid is grown.”
Yet after those 20 years, I’ve heard clients say, “I’ve paid into this and I’d like to leave my child some life insurance, no matter how old he is.” So even if young parents can only afford term life insurance this year, I revisit the discussion periodically.
Read: You need a Plan B
What’s mom worth?
A 2011 Salary.com survey