Insure your stay-at-home spouse

Insuring your stay-at-home spouse can seem like a waste of money because he or she doesn’t earn a paycheque that would be lost if tragedy struck. Yet, if they died, you would be left scrambling to cover funeral and other costs during a time of grieving.

Your stay-at-home spouse likely accomplishes a lot in a typical week doing several unpaid jobs. A 2011 Salary.com survey determined the average stay-at home mom “earns” $115,000 a year, working upwards of 100 hours each week in several key roles such as chef, housekeeper, and daycare teacher.

Because they do so much, a realistic life insurance policy figure to consider is roughly $1 million—lower amounts like $100,000 invested at today’s low return rates won’t last long, especially when it has to fund all the jobs your spouse does.

The type and duration of the insurance can vary based on your specific needs, usually ranging from a 20 year term to ensure your spouse is insured while any children are young, to a permanent policy that can make premiums more predictable.

Life insurance can shield you from the potentially enormous financial impact of the death of a spouse, but if your stay-at-home spouse develops a serious illness that prevents them from looking after your household, you could still be in trouble.

And, while non-working spouses don’t qualify for disability policies, they can purchase critical illness (CI) insurance.

In the event of cancer, for example, a lump-sum payment from CI would pay for someone to take your spouse to treatments, a caregiver to look after your children during recovery, and other unanticipated expenses.

Not having your stay-at-home spouse insured is a dangerous form of gambling. With the right combination of life insurance and CI, you know that you’re financially prepared for the worst—ensuring that personal tragedy won’t be compounded by financial devastation.