In honor of Mother’s Day, I want to highlight a recent analysis by Insure.com for the value of the work that a mom does all year round. According to their Mother’s Day Index, all the issues that a typical mom takes care of adds up to $61, 436/year.
Given the source of this info, it’s perhaps unsurprising that they then translate this into life insurance coverage needs. In most cases, it’s an easy decision that the breadwinner(s) need to be insured, but have you considered stay-at-home parents? While it’s perhaps much less obvious that a stay-at-home parent needs life insurance coverage, you have to think about paying somebody to handle their duties if something were to happen to them.
The first step in working out how much life insurance you need is to figure out what you want the policy to carry out for you. If, for example, you are interested to cover certain expenses for that set period of time, you’ll need to tally up those expenses, multiply via the timeframe, and adjust for reasonable price increases.
When considering the primary breadwinner, a common rule of thumb is 10x annual earnings, though you’ll obviously wish to fine tune that for your specific situation. But what about stay at home parents? It’s not unreasonable to value their “earnings” at whatever may well cost to pay someone to fill out for them.
And that brings us returning to the Mother’s Day Index, which was based on data from the Bureau of Labor Statistics. If you’re curious, the Index included the next 14 major jobs:
- Cleaning up
- Party planning
- Summer activity planning
- Managing family members finances
- Yard work
- Home maintenance
- Private investigator (to figure out what the babies are up to)
Obviously, a number of these aren’t the sole responsibility of Mom, but they also broke a number of them down into part-time hours before getting to their grant total ($61, 436/year).
What ya think? Is this a reasonable estimate from the value of the efforts of a typical stay-at-home parent? Too low? Too high? Let us know in the comments.