November 3rd is National Homemaker Day. It’s a day to celebrate the people who keep our households running! Homemakers are the backbone of many families. They are responsible for managing the household, raising children, and providing emotional support to their loved ones. While homemakers may not earn a traditional paycheck, their contributions to the family are invaluable.
Unfortunately, homemakers are often overlooked when it comes to financial planning. One important area where homemakers are often underinsured is life insurance.
Life insurance is a financial safety net that can provide financial security to loved ones in the event of the homemaker's death. It can help to cover funeral expenses, pay off debts, and provide income to support the family.
There are several reasons why it’s important for homemakers to have enough life insurance:
- Homemakers provide valuable services to their families. Homemakers cook, clean, care for children and elderly dependents, and manage the household budget. These services would have to be replaced if the homemaker were to die, which could be expensive.
- Homemakers may have lost income potential due to their family responsibilities. If a homemaker dies, their spouse or partner may have to reduce their work hours or even leave their job to care for the children or elderly dependents. This could lead to a significant loss of income for the family.
- Homemakers may have debts that would need to be paid off. Like everyone else, homemakers may have debts such as credit card debt, student loan debt, or mortgages. If a homemaker dies, their debts will still need to be paid off, even if they did not have a traditional paycheck.
- Homemakers may have financial goals for their children. Homemakers may want to save for their children's college education or help them buy their first home. Life insurance can help to ensure that these financial goals are met, even if the homemaker is no longer there.
The Effect of Life Insurance on a Personal Financial Plan
Life insurance is an important part of a comprehensive personal financial plan. It can help to protect loved ones from financial hardship in the event of the homemaker's death.
When choosing a life insurance policy, it is important to consider the following factors:
- Amount of coverage: The amount of coverage needed will vary depending on the individual's circumstances. Some factors to consider include the homemaker's debts and financial goals for the family.
- Type of coverage: There are two main types of life insurance: term life insurance and permanent life insurance. Term life insurance provides coverage for a specific period, such as 20 or 30 years. Permanent life insurance provides lifelong coverage and has a cash value component that can be borrowed against or withdrawn in retirement.
- Cost: The cost of life insurance will vary depending on the type of coverage, the amount of coverage, and the homemaker's age and health.
How to Get Started
If you are a homemaker and you do not have life insurance, or if you are not sure if you have enough coverage, contact us. One of our financial advisors can help you assess your needs and choose a life insurance policy that is right for you and your family.