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Insuring Against The Loss Of A Homemaker

b Mark P. Cussen,CFP, CMFC (Contact Author Biography) Whe he e i ha e i , e e e h d i c ide c e hi i a ce, c e age f ig e i i a e i c e b ac e . B he ec ic e ace e c di c ed. TUTORIAL: I d ci T I a ce cha i g ife i a ce. U f a e , he i fe e ed, e ecia if he h eh d i fa ig e h d e e be

Y ' e bab ead he a ic e hea d TV he a di h fig e aced he a e f h e a e ' .S ee i ae a ah e a e i h $500,000 e e ea beca e f he e d e i f a a d b de ha fi a a -a -h e a e ' da . H e e , MSN.c he e h e a e ' ac a ec ic c a a a e e a f $30,000 ("Wha ' A H e a e W h? The Sh c i g T h", 2008). I hi a ic e, e a e a a ce be ee he e be a e di c ha he ec ic e ace e a e d be c e a h e a e ' f e ice e f i a ce e i a e . (T fi d hich i a ce icie h d b , chec Five Insurance Policies Ever one Should Have a d Fifteen Insurance Policies You Don't Need.) Hidden Value of a Homemaker's Duties Child Care Whe he ig e f a i g e-i c e fa i i h a chid e i , he c f e aci g he d ie ha he he e f ed ca be b a ia , a ic a if he fa i ha f ie d e a i e h ca ide ga e ca e he f a i d. Bab ce e .c e i a e he c f f - i e da ca e ca a ge a he e f $3,000 $15,000 e ea e chid, de e di g he ca i a hich he ca e i ided, a e a he age a d be f chid e . Of c e, if c e e da ca e i a aiab e, a ie ca c e e e. A fa i i h chid e age , h ee a d fi e ha i be ef f he h e a e c d ea i be f ced e d e he e be ee $10,000 a d $30,000 a ea da ca e e e e a e f a ea he fi ea , i h e e e a i g dec i e ce he chid e each ch age. B hi i d f fi a cia b de a i ed -i c e - e e idd e-i c e - fa i ca be de a a i g. Chef Duties Whie ea c d be i c ded i he c f a da ca e facii ie , he e a i be a eed f ea ide he da ca e ched e ha he e ai i g a e ca ide a eg a ba i . If he e ai i g ae e e ig e i e i de a e e d ee , he e be a e a ed b a hi d a (if he chid e a e g d i he e e ). The c f hi ca ea i $100 e ee (a d $5,000 e ea ) e, de e di g he a i f he ea ha a e ided. Maid Service A he e e e c ide i h ec ea i g, hich ca c a he e f $50 $150 e c ea i g. If he h e be c ea ed ice a h, ha c e a he $1,200-$3,600 e ea . Whe a
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these costs, it may be prudent to hire a full-time nanny who can cook, clean and provide child care if it is cheaper than the aggregate cost of each service provided separately. The U.S. Bureau of Labor places the costs of a full-time nanny at anywhere from $15,900 to $29,280. Counselor Counseling services for family members should also be taken into account. Not only is the homemaker the one cooking, cleaning and babysitting they are also the heart of the home. Losing this valuable member of the home could cause repercussions emotionally that the remaining spouse may not be able to handle on his or her own. The cost of paying for a counselor once the homemaker passes away may be in the tens of thousands of dollars - which confirms that love truly is priceless. Possible Solutions The combined cost of all of these services could obviously ruin the average low- or middle-income family with no life insurance coverage in this area. There are essentially three possible solutions for families that suffer the loss of a non-working spouse: 1. Pa the e penses out of pocket - Obviously, this solution is only available for wealthy or upper-class families. 2. Remarriage - While this may well be the best possible option, it is dangerous to rely on this course of action as a solution. Even if the surviving parent does remarry, it is possible that the new spouse may have a full-time job that he or she is unwilling to give up. Even though the income from that job could theoretically be used to pay for the necessary expenses, the new spouse may not be amenable to this idea. 3. Life Insurance - This is likely the most reliable and safest option of the three. The amount of coverage to be purchased should be determined in exactly the same way as for the breadwinner: through a needs-based cost-replacement analysis. The family should compute the approximate costs that will be incurred from the loss of the non-working spouse and purchase enough coverage to offset these costs. For example, if the cost of counseling, childcare and other services come to $45,000 per year for the first three years and decline thereafter, then at least $135,000 of coverage (and probably more) will likely be necessary in order to adequately cover all necessary expenses. (To learn more, see Ho Much Life Insurance Should You Carr ?) The Bottom Line Although it is not likely that as much insurance will be required for the non-working spouse as for the breadwinner, the loss of the homemaker is just as difficult to deal with in many respects. Many needs must then be met and paid for in order for the family to continue to function. Proper life insurance coverage for homemakers should therefore be an integral part of any financial plan. b Mark P. Cussen,CFP, CMFC (Contact Author | Biography) Mark P. Cussen has more than 15 years of experience in the financial industry, which includes working with investments, insurance, mortgages, taxes and financial planning. He has five of experience as a financial author and has written many educational articles for various financial websites as well as revising and updating training material for insurance and securities licenses. He has also worked in retail, discount and bank brokerage systems and is currently working as a financial planner for the U.S. military. Mark has a Bachelor of Science in English from the University of Kansas and completed his CFP coursework at the Bloch School of Business at the University of Missouri-Kansas City in August of 2001.
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