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Why a Non-Working Spouse Needs Life Insurance

By on March 17, 2014 in Insurance, Life Insurance

Why a Non-Working Spouse Needs Life InsuranceWe normally associate life insurance most closely with breadwinners. The thought is that the primary need for life insurance is a replacement for lost wages. But a non-working spouse needs to have adequate life insurance coverage just as a wage earning husband or wife will.

Even though lost wages a primary factor in the need for life insurance, there are various expenses that will need to be covered in the event of the death of a non-working spouse.

To pay final expenses

Everyone needs a sufficient amount of life insurance to at least cover final expenses. These will involve funeral expenses and any unpaid medical bills that resulted from treatment prior to death. Since a larger amount of medical costs are now being paid by consumers, this amount needs to be larger than ever. $50,000 would seem to be a minimum to cover these expenses for just about anyone.

To cover childcare and/or household responsibilities

When a nonworking spouse dies, there is no one at home to handle household chores. This can include an almost infinite number of responsibilities, including meal preparation, grocery shopping, paying bills, laundry, housecleaning or even dealing with complications such as billing problems or insurance follow-up.

All of these responsibilities will have to be handled by someone, and the working spouse may not have time to do it. This may create the necessity to hire out certain services, such as housecleaning or even laundry services. It may also result in more meals being consumed outside the home.

If there are children in the home, the situation will be complicated even more. It can easily cost over $1,000 per month for the childcare for just one child.

Each of these responsibilities will need funding from some source, an life insurance is the best option.

To deal with emotional issues

One of the factors that is not fully appreciated in the death of a loved one are the emotional issues that can carry on for months or even years after the fact. This can create the need for counseling and even medication, which are only the most obvious costs.

In extreme circumstances, a death could also result in lost wages. You could become so distraught that you need to take time off of work. Some people even stop working for a time, unable to come to grips with the loss. Having additional funds available from life insurance could help minimize the financial impact of these emotional issues. You may want to consider having enough life insurance to cover such an outcome, in addition to the other needs discussed.

To provide for children’s education

The death of a spouse, even a non-working spouse, can impair a family’s finances for years. That can leave the surviving spouse with few financial resources when it comes time to put children through college. Even if you are able to cope with all of the expenses that result from the death of a spouse, you may still want to have funds available to help fund college.

A relatively inexpensive term life insurance policy could be more cost-effective in providing college funds than a savings and investment plan. If the funds for that savings and investment plan are unlikely be available, the life insurance policy will be the best alternative.

The death of anyone as significant as a spouse is likely to cause a series of unexpected financial needs. Never assume that replacing lost wages is the only reason for having life insurance. A non-working spouse needs significant life insurance coverage, in much the same way that working spouse does.

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