In honor of Mother’s Day, I wanted to highlight a recent analysis by Insure.com on the value of the work that a mom does throughout the year. According to their Mother’s Day Index, all the stuff that a typical mom takes care of adds up to $61,436/year.
Given the source of this info, it’s perhaps not surprising that they then translate this into life insurance needs. In most cases, it’s a no brainer that the breadwinner(s) need to be insured, but what about stay-at-home parents? While it’s perhaps not as obvious that a stay-at-home parent needs life insurance, you have to think about paying someone to handle their duties if something were to happen to them.
The first step in figuring out how much life insurance you need is to figure out what you want the policy to do for you. If, for example, you need it to cover certain expenses for a set period of time, you’ll need to tally up those expenses, multiply by the timeframe, and adjust for reasonable price increases.
When it comes to the primary breadwinner, a common rule of thumb is 10x annual earnings, though you’ll obviously want 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 it would cost to pay someone to fill in for them.
And that brings us back 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 following 14 major jobs:
- Cleaning up
- Party planning
- Summer activity planning
- Managing the family finances
- Yard work
- Home maintenance
- Private investigator (to figure out what the kids 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 arriving at their grant total ($61,436/year).
What do you think? Is this a reasonable estimate of the value of the efforts of a typical stay-at-home parent? Too low? Too high? Let us know in the comments.