Life insurance companies understand the importance of taking care of the home, which is why a non-working spouse can qualify for life insurance. In most cases, a stay-at-home spouse can purchase the same amount of coverage as the income-earning spouse. In this article, we will explain how life insurance companies determine the amount of income a stay-at-home spouse can qualify for and provide some tips to help save on the cost of coverage.
Will My Non-Working Spouse Qualify for Coverage?
Yes, a non-working spouse can qualify for coverage. Life insurance companies understand that a death in the family can cause serious financial and emotional hardship. Without a spouse taking care of the household, the income earner’s potential to earn a paycheck is limited. After the loss of a stay-at-home spouse, the primary breadwinner of the family is often unable to maintain their income and work responsibilities. This is why life insurance companies approve an application for a non income-earning spouse.
How Much Life Insurance Should My Spouse Purchase?
When deciding the appropriate amount of coverage to buy for a spouse, most clients purchase a policy for about 75% of the coverage the income-earning spouse purchases. At minimal, a policy providing income replacement equaling the years until the youngest child would be “out of the house.” This coverage would be used to pay for childcare expenses, transportation to and from school, and help around the house. If you have long-term or indefinite care-giving responsibilities, you’ll want to consider both the policy benefit and the number of years you expect you’ll need life insurance.
What Type of Life Insurance Should I Purchase for My Spouse?
The most common type of life insurance purchased for a non-working spouse is term life insurance because it provides the largest death benefit for the lowest monthly cost. If your caregiving needs are indefinite, then you’ll want to consider a “Guaranteed Universal Life” (GUL) policy. Due to their longevity, GUL policies are often purchased by parents with children who have special needs. These lifetime policies will provide peace of mind and offer coverage until the age of 90 or later.
|Term Life Insurance||Lowest monthly cost and largest death benefit|
|Guaranteed Universal Life Insurance||Offers coverage until age 90 or later|
It is important to work with an independent life insurance agent to find the best rates available for your family’s life insurance needs. Most local agents only represent one life insurance company, but an agent that represents at least 10-15 life insurance carriers can help you save money. Life insurance companies will consider your income when determining the amount of coverage you can qualify for, so purchasing coverage before retirement is recommended. By having access to so many top-rated carriers, we can usually find the best life insurance company for your needs.
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