If I’ve had this conversation once, I’ve had it a thousand times. I’m working as a life insurance agent and I’m sitting with a couple where one of them makes all the income and the other stays at home. The breadwinner(usually the man) sees an obvious need to insure his own life since his wife would lose all the household income if he died. Then we turn to the wife and the husband says something like, “Oh well she doesn’t make any income so I can obviously take care of everything with my income if she dies.” She looks slightly offended but doesn’t say anything. I raise a couple of counterpoints to what he just said, and he isn’t having it. To him, it’s all about lost income and nothing else. If there is no lost income, why bother insuring someone?
Maybe you have this perspective if you’re reading this article. Keep reading! I have some things you may not have considered when it comes to your stay-at-home spouse.
1) Accounting for new, unexpected expenses after your spouse’s death
If your spouse passes away unexpectedly, there will be some expenses facing you that are out of the ordinary. First, the funeral. Cremations will average around $3,000-$6,000 and traditional services(including cemetery) can easily run $15,000-$30,000. Tombstones can cost anywhere from $3,000-$60,000 depending on your preferences and how much emotional spending you are doing. Emotional spending is a real thing and can hit people when they least expect it. What I mean is that you would be spending more money than you normally would under normal circumstances because you are so grief-stricken at the loss of your spouse. I remember seeing a study years ago where there were various circumstances rated from the most stressful to the least stressful for the average person. The death of a spouse was #1 on the list. So, there is a high likelihood that emotional spending will take place.
In addition to that, you may have an outrageous medical bill headed your way. Depending on the nature of your spouse’s death, there is a real possibility that a hospital, surgeon, ambulance, expensive equipment/medications, etc. were all involved during the last moments of that person’s life. Will they all give you a pass because your spouse died? Nope. The bill is coming and there is no discount with it. It’s impossible to predict what those costs would be, but it is much better to be prepared for them and not have to tap into your lines of credit or retirement to pay for them(if they are even available).
2) Do you have children? And are they homeschooled?
One thing to remember in this scenario is that, if you have children, they will definitely be impacted by the death of your spouse, and not in a good way. While the mindset of “I can survive just fine on my income” looks at one piece of the pie, it doesn’t consider the reaction of your children. Will there be a major disruption to their routine? Are they in multiple sports or other activities that your spouse normally drove them to? Will your children need counseling or time in after-school activities since you can’t pick them up at the same time your spouse did? If they are homeschooled, what happens then? Will you be able to pick up and teach them without affecting your job? Is there a homeschool community who will step up and help pick up the slack for you? Do you want to assume that will happen or just be surprised if it does?
These things have a cost associated with them. Life won’t look the same. Major disruptions will happen, and YOU will have to pick up the slack as the survivor. The amount of stress that gets added to your life overnight will overwhelm most people. That can affect your job, your relationship with your kids, your health, etc. Everything can come crashing down and cause your income to stop in an instant. Having funds available to help with all of these disruptions will remove extra stress from your life. Will you still have extra stress? Absolutely! Your spouse just died. Of course things will be stressful. However, removing the financial stress of it all can alleviate it enough to allow you to focus on your job and continue earning that income to continue supporting your family. Life insurance can do that for you.
3) The cost of what your spouse does at home
Have you ever seen one of those studies that show how much a stay-at-home spouse is worth on an annual basis if you consider all the tasks that are performed daily and what it would cost to pay someone to do it? The numbers usually range between $100,000-$200,000 annually. The list includes paying someone to: cook, clean, carpool, transport, clean laundry, landscaping, babysit, educate, help with homework, etc. I’m simplifying the list because I think you see my point. These daily tasks that we all take for granted don’t magically get completed. If your kids can’t do them, and you are too busy at work to do them, who is going to do them? You may have family and friends to support, but how likely is it that they can do this indefinitely without a major disruption to their lives? With life insurance, you can have funds in place to pay for these things. These items would be included in the list of “new, unexpected expenses” on point 1, and it takes money to pay for them.
I am not trying to paint a doomsday or worse case scenario picture for you. I’m simply showing you very real things that can happen to you that would all have expenses associated with them. If you are relying on that income to pay for everything, will you be ok if your expenses suddenly skyrocket? Most people assume expenses would decrease after a spouse’s death, but that is simply unlikely when you consider all these things I mentioned. Also, I’m giving you the simplified list. The items could be much more detailed than this. It’s always better to plan for a worst case and end up not needing it than to under-plan and get blindsided later.
Now, I want to highlight things you SHOULD NOT count on to be there for you if your spouse passes away. What I mean is: don’t assume these will happen, and don’t use the likelihood of them occurring to be an excuse to not properly plan with life insurance. If these people/examples DO step in, GREAT! From a future planning perspective, it’s best to be prepared in case they don’t, and to be surprised if they do.
1) Family and friends
Maybe you are blessed to have family and friends close by and they’ve been telling you that if anything happened to you or your spouse, they’ll step in and take care of everything. I certainly hope that’s true and it happens like that in the event it’s needed. However, what would happen if family and friends DO step in, find themselves becoming overwhelmed with the added responsibility of taking care of your family in addition to their own, and begin to get so stressed that the relationship becomes strained? There’s also a real chance that some of these people may begin to resent you for your lack of planning on the life insurance side. Would they think, “Why in the world didn’t he buy life insurance on her?” Maybe not, but is it worth chancing it? Again, this is a situation that life insurance can alleviate. You would have the option of either paying family and friends for services, or paying for someone else to step in for a while and help cover the needs. Taking the financial stress away from the situation helps the entire situation.
2) Church
What I mean here is: don’t count on the church to give you money. If you are part of a church fellowship and they offer to pay for things, there is nothing wrong with letting them do that. I’d like to propose an alternative plan: what if you have enough life insurance in place so that you don’t need to take the church’s money? What if you can buy everything yourself and the church can use the money for someone else who may be worse off than you? Would that be worth it? I am not discouraging people from accepting the church’s money if you need it. If you need it and they offer, then accept it and let it bless both of you. All I’m saying is why not have an option to not need it?
3) GoFundMe
This one is a recent development. If you’re not familiar with this, here is the summary: anyone can setup a GoFundMe online and encourage everyone to contribute money to it. It’s the same idea as a local newspaper announcing someone’s death and also announcing that anyone wishing to donate money can go to X Bank and make a contribution for the family in a designated account. GoFundMe is online and eliminates the need to physically go anywhere. All funds go to the beneficiary of the account. These can be great for people in all types of circumstances. If you are fortunate enough to have a network of support around you, you may end up with a GoFundMe on your behalf, and it may help you in your time of need. My advice here is the same: don’t count on it. Plan as if it won’t happen, but be surprised and blessed if it does.
There you have it. If you haven’t figured it out yet, I’m a fan of insuring the life of any adult who is responsible for other people. If you started this article with the mindset of, “I’ll be ok because I make the income,” then I’m hoping these other points have expanded your mind to other needs besides the monthly income. Talk to your life insurance agent about getting the best policy for both of you and don’t delay. Make it happen.
“So do I, and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”