Life Insurance for Non-Working Spouses [2024]

If you stay home to take care of your children and manage the home, you may not have an insurance policy. It’s very common for spouses who do not work outside the home to go without a life insurance policy. 

But what would your family do if something happened to you? How would your spouse manage the home, take care of the children, and continue to work outside the home? For many stay-at-home spouses, purchasing a life insurance policy is a great way to make sure their children and partner are taken care of.

Does a non-working spouse need life insurance?

Many people who manage the home instead of working outside the home assume they don’t need life insurance. However, in most cases, one spouse stays home to care for the children and handle the day-to-day activities while the other has a full-time job.

The basic rule of thumb for life insurance is to take your annual income and multiply it by five to 15 to decide how much insurance coverage to carry. When couples use this tactic, they might assume that the spouse who does not work outside the home doesn’t need a life insurance policy because they do not generate income.

But while families can use life insurance to replace the income that is lost when a spouse passes away, a life insurance for families policy is also helpful to protect a family from financial hardship after a loss.

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Will the death of a stay-at-home spouse create financial hardship?

A stay-at-home spouse, especially one who stays home to look after children, has a lot of responsibilities. Spouses who work inside the home are often responsible for caring for children, teaching children, feeding the family, cleaning and maintaining the household, running errands, and more.

Suppose a stay-at-home spouse suddenly passed away. The living spouse would need time to grieve the loss, and they would also need to help their children come to terms with losing the parent they saw the most.

Once the grieving process ends, the living spouse needs to figure out exactly what they will do to earn money and care for the children and the household. In many cases, the surviving spouse considers hiring someone to help in either a part-time or full-time capacity.

But hiring someone to run a household and take care of children can be extremely expensive. In many cases, the help hired to replace a stay-at-home spouse costs tens of thousands of dollars a year. When you consider this financial burden, it makes sense to consider purchasing life insurance for the non-working spouse.

How much life insurance does a non-working spouse need?

Determining how much life insurance a stay-at-home spouse needs can be difficult. Many different factors contribute to determining how much coverage a non-working spouse needs. Some of these factors include:

• The non-working spouse’s age
• Whether the couple has children
• The age of the children
• Whether the non-working spouse intends to work outside the home in the future

Sometimes the best way to determine how much life insurance a non-working spouse needs is to speak with an insurance agent to learn about the various options. Among the most common options for life insurance coverage are term and whole life insurance policies.

Does a stay-at-home spouse need a term or whole life policy?

While there are other life insurance policies, term and whole life policies are by far the most common. If you are a non-working spouse, how can you choose between the two?

One of the best ways to choose is to consider the age of your family. For example, if you are in your 20s or early 30s and have young children, you may want to consider purchasing a term life insurance policy. This is especially true if you believe you will eventually return to the workforce once your children are older.

Term life insurance policies cover a policyholder for 10 to 30 years. If you want added financial security while building equity in your home and raising your children, a term life policy is a great option. At the end of the term, a term life policy will simply end without the policyholder having to do anything to cancel the policy.

Whole life insurance policies may be a good idea for a non-working spouse who cares for a child that needs around-the-clock attention or for a spouse who stays home and knows they will not enter the workforce. 

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How much is life insurance for a non-working spouse?

It is not easy to know exactly how much you will pay for life insurance until you shop for quotes online. And quotes between a term and whole life insurance policy will vary significantly.

The table below shows the average monthly rates for a 20-year term life insurance policy based on a person’s age and gender.

Average Monthly 20-Year Term Life Insurance Rates by Age and Gender

Now, compare the rates above to the table below, which shows the average monthly rates for a whole life insurance policy based on a person’s age and gender.

Whole Life Insurance Monthly Rates by Age, Gender, & Coverage Amount

As you can see, life insurance rates go up as you get older, and they tend to be higher for men than for women. Additionally, a whole life insurance policy can be much more expensive than a term life insurance policy, depending on the coverage amount.

For many families, the relatively inexpensive rates associated with term life insurance policies are another reason a term life policy ends up being a better option for a stay-at-home spouse. 

Case Studies: Life Insurance for Non-Working Spouses

Case Study 1: The Smith Family

The Smith family consists of John, the working spouse, and Sarah, the non-working spouse who stays at home to take care of their two young children. They realized the importance of financial protection for their family and decided to explore life insurance options for Sarah.

After consulting with an insurance agent, they determined that a term life insurance policy would be the best fit for their situation. They chose a coverage amount that would provide sufficient funds to cover childcare expenses and household responsibilities in the event of Sarah’s untimely passing.

Case Study 2: The Johnsons

The Johnsons have a child with special needs, and one parent, Emily, stays home full-time to provide round-the-clock care and support. Recognizing the unique circumstances of their family, they decided to purchase a whole life insurance policy for Emily.

This type of policy would ensure that their child’s long-term care needs would be met even if Emily were no longer able to provide direct care. The Johnsons consulted with an insurance agent to determine the appropriate coverage amount and customized their policy to address their specific requirements.

Case Study 3: The Rodriguez Family

In the Rodriguez family, both spouses, Alex and Maria, work outside the home. They initially believed that only the working spouse needed life insurance. However, after further consideration, they realized that Maria’s contributions as a stay-at-home parent were invaluable and needed protection as well.

They opted for a term life insurance policy for Maria, with a coverage amount based on the estimated cost of hiring household help and childcare services. This coverage would provide financial stability for their family in the event of Maria’s unexpected passing.

Read more: Life Insurance for Parents 

Life Insurance for Non-Working Spouses: The Bottom Line

Even when a stay-at-home spouse does not earn income outside of the home, a non-working spouse does a great deal of work to care for children and manage the household. Therefore, the financial burden of hiring someone to take on the responsibilities of a non-working spouse can be severe.

To avoid feeling the financial strain associated with the death of a stay-at-home spouse, it’s a good idea to purchase a life insurance policy. In many cases, a term life insurance policy can be a helpful and inexpensive way to ensure the family will be cared for if the non-working spouse passes away. 

Read more: Life Insurance for Widows

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