Why Stay-at-Home Parents Need Life Insurance

The pandemic has turned many two-income families into one-income families, as millions of parents have left the workforce to take on more childcare, teaching, and household duties. Here’s how you can help them.

Stay-at-Home Parent Valued at $185,000 Annually

Homemakers provide a tremendous monetary benefit to their families that’s hard to replace. If you tallied up all their “jobs”— teacher, babysitter, housekeeper, cook, project manager, chauffeur, etc.—the salary equivalent would be nearly $185,000 a year, according to Salary.com.

According to a recent study, the number of stay-at-home parents has risen 60 percent since 2019. Women outnumber men in this regard, a trend that accelerated during the pandemic as more women left the workforce voluntarily or through layoffs.

Bottom line: Today’s single-income families have more financial vulnerability than before. That means it’s more important than ever to make sure both parents have life insurance protection.

Talking Points

It’s easy for busy families to lose sight of their life insurance needs, whether their full-time jobs are outside or inside the home. Here are some helpful talking points when speaking with clients who are full-time homemakers:

Stay-at-home parents provide vital services that are valued at $185,000 annually, and it would be very expensive to replace all that they do. As a starting point, multiply their salary equivalent by 10x to determine a preliminary life insurance coverage need, just as you might for someone with a full-time salary.
Needs vary depending on local living costs and number and age of children. For clients under tighter financial constraints, encourage them to find out how much they can get approved for first—it takes just minutes with Ethos. Most people significantly overestimate the cost of term life insurance. Then, help your client determine the length of time they’ll need coverage and amount they can afford. It may make more sense to get less coverage for a longer term, or vice versa. It’s important to note: some life insurance protection is always better than none.
The most important thing is to consider how much life would change for the surviving parent without a full-time homemaker. Life insurance can cover childcare costs, living expenses, school tuition, credit card debts, and much more. The right coverage would alleviate financial stress at a difficult time, so that the surviving parent could focus on family needs without dipping into savings, taking out a loan, or selling the family home.
Stay-at-home spouses can easily qualify for coverage, regardless of whether they generate an income. Additionally, if the other working parent has life insurance through their employer, they likely need supplemental coverage beyond the 1x–2x salary amount typically offered through workplace plans.
The pandemic has taught us that unexpected events can radically change how we live. Life insurance through Ethos is the simplest way for stay-at-home parents to prepare for the unexpected and have peace of mind.
Ethos can help stay-at-home parents find the best life insurance coverage for their needs, typically in 10 minutes or less, with no medical exams required.

Common Misconceptions

Here are some of the questions you may hear when you ask your stay-at-home clients about life insurance:

Q: Are stay-at-home parents even eligible for life insurance?

A: Yes! Stay-at-home parents are eligible and need it just as much as parents who work outside the home. Life insurance provides critical replacement costs for many of the services a full-time homemaker provides.

Q: My spouse has a policy through their employer that is 1x salary. Isn’t that enough?

A: No. Working parents should also have a policy to replace lost future earnings. And keep in mind that employer policies typically cover just the employee, so stay-at-home parents need their own policy.

Q: I’m a stay-at-home parent, so why do I need life insurance?

A: Life insurance is not just for working parents. As the non-breadwinning parent, your work is very expensive to replace. If something were to happen to you, a life insurance policy would provide critical financial support to your family.

Q: Doesn’t my spouse’s policy cover me, too?

Most life insurance policies only cover one person—known as the insured—unless otherwise specified.

Next steps

Let your stay-at-home clients know you can help them find a policy for their needs. In the Ethos agent portal, you’ll find everything you need to help them get life insurance protection:

If you’re a licensed life insurance agent, you can start a quote and send it to your client. Your client can use it to begin the application process and get coverage right away, typically in 10 minutes or less.
If you’re not licensed to sell life insurance, you can share a unique referral code with your client to begin the process themselves. All your earnings will be tied to this referral code. You’ll be able to track your client’s progress and your earnings in the agent portal, or in your CRM.
Find life insurance information to share with your customers in the Resources section of the agent portal. Or, send them to our Help Center for general information on life insurance.

Pro tip: Encourage either spouse to take advantage of the referral incentive offered upon policy activation, which benefits you and them.

Just getting started with Ethos? Find the support you need to scale your business in our resources section.