A Life Insurance Policy On A Home Makers LifeHome
This family has now become a one income family. It doesn't take too long for these people to be intensely aware that if the working spouse died the family would be in what could only be described as a very serious financial position...so a decision is made to buy a life insurance policy sufficient to provide an income until the youngest child is at the least out of school. It would be wise to really provide until this child has graduated college. After this is done they can now relax and go about their daily chores...or can they? Let us look at some of the chores of the home maker. He or she has to take care of the children, preparing meals, doing the laundry, shopping and keeping the home clean and tidy. All this while keeping a sharp eye on the children, making certain that they do not hurt themselves or otherwise get into any trouble. In the evening they have to sit and listen to the problems the working spouse experienced that day. What kind of value can we put on that... Even though the home makers worth cannot be worthily measured these people realize they must put life insurance on his or her life. You see if this person dies, even though initially friends or relatives may step in and help with the chores, eventually someone is going to have to be paid to take care of this home makers job. The salary of such an employee can easily be between $30,000 and $50,000 per year... Now let us say your youngest child is age 10. You would need to employ a home maker until he or she is at least age 18. At minimum you would need a life insurance policy for $240,000. That is $30,000 x 8 years. If you anticipate you would have to pay a salary of $50,000 you would need a life insurance policy in the amount of $400,000. It is imperative that the home maker has his or her own life insurance policy...for the sake of the survivors. Most people use term life insurance policies to do the job. One of the favorite policies is the 20 year term policy but depending on the age of the children a 10 year term policy or a 15 year term policy may do. It may be wise to maintain a life insurance policy after the children have graduated college. Some people choose a 25 year term policy or a 30 year term policy. Most of these life insurance policies have a conversion privilege so if you have a need for life insurance for a longer period of time you can convert your policy to a permanent policy like universal life insurance , variable universal life , variable life or whole life insurance. These life insurance policies have cash values which may be used to top up your retirement income. You can also add the waiver of premium rider or the double indemnity rider to your life insurance policy.
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