How Much Life Insurance for SAHM

Enough to cover paying off the house/mortgage or what the going rate for a house is in the area of you do not own. That way hubby can have a place to live and not worrying about paying it. That is what we do. I pay $16 a month for it and it is worth it. That is how we decide.

We homeschool as private school is too expensive for us, so we based it on the most expensive private school until college, plus since I make all meals from scratch ( love to cook, not to save money but it does save money) we assumed that hubby would not have the time to homecook every night so either more eating out or more frozen meals that can be microwaved and that is more expensive. We also thought that an extra 1000 to 2000 a year while the kids were small would be helpful.

This ended up being 250,000 per child. Every time I have a new baby we get another 250,000, 20 year level, term, life insurance on me along with a child funeral rider (meaning if said child dies they pay for the funereal up to how ever much you want that to be... Ours is 10,000 dollars and is a .10 add on). Hubby has 800,000 on him but that doesn't reflect his income, more the fact I like the security of extra cash, just in case. Also we set up a trust to be the beneficiary of the insurance money, not me or hubby. The reason for this is if the unheard of happened and both of us dies at once we then wouldn't both have 55 to 60% of the money taken in death taxes for the kids. It cost us 1000 dollars with an attorney but gives us such peace of mind! Also we have a bank as executioner of the trust because You don't want the people/person that is going to care for your kids to think: JACKPOT!!!!$$$$$$$!!!!!!!, you want them to think: I love them so I want to raise them. If you just leave it to each other the money to raise the kids just goes to the new caregiver of the kids and they can just spend it on brand new cars and expensive vacations and then in 3 years... well, grandma gets the kids because the money has run out and the new caregiver doesn't want them anymore (and I know that no one thinks that their family would be like that, but when that much money is just there... well, some people go CRAZY when they were not before.)

We have enough to cover the cost of the house and cost of a nanny/babysitter for several years if something should happen to me. I would recommend at least a 20 year term because you want to make sure you at least have life insurance while your children are still young and living under your roof. If you've not finished having your children, then I would recommend a 30 year term.
If you contact a reputable insurance company, they have formula's that they can plug in and give you an answer about how much insurance you might need. They kinda go a little over the top because they are trying to sell you as much as they can, so you don't necessarily need to buy as much as they recommend. I'm just telling you that so you can be careful. Also, I don't recommend anything other than term insurance. Insurers will do a good job selling you a Whole Life or even a Universal Life policy, but those types of policies make good revenue for them and cost you an arm and a leg.
If there is one more thing I can recommend, it would be to GET IT WHILE YOUR HEALTHY! Thankfully, we purchased a 200,000 policy while I was a "healthy" adult. I was diagnosed with MS and I then wanted to purchase additional insurance but it was at a much higher rate.

Any life insurance agent should be able to answer this for your specific situation but if you want to make sure you're not being oversold, figure out a yearly "salary" for yourself based on what your husband would need to hire out if you weren't there. Your kids are older so you might need only after-school and evening childcare, but if your husband travels for work or leaves before the kids go to school and you would want someone to be there to get them out the door in the morning, maybe a live-in would be appropriate. Figure out how much it would cost to have someone do housekeeping, bookkeeping, yard maintenance, cooking, tutoring or homework help. Do you have pets? Would they require dog walking or daycare? Think about all of the things that you do and how much it would be to have someone do those things, and that's your salary. For a SAHM, that amount could be anywhere from $25,000 to $75,000 for an average family.

You can then apply the 10x formula to that. Another formula is to take the total amount of insurance, multiply it by 6% (what you would make in an average year when conservatively invested) and that will tell you how much interest your investment would generate each year and your survivors can live off of the interest and leave the principal untouched for big expenses such as education or retirement or to be later distributed to your heirs. Assuming that your husband will be able to continue to save for college or retirement goals without you there, this lump sum method may not be necessary - but if he was planning on your going back to work later to help reach some long-term goals, that type of arrangement could be valuable.

Good for you for asking this - now make and appointment with your agent and buy a policy!

I live in Texas and have 3 kids. I have a 400,000 20 year term policy. Costs me 130.00 a year. If I die my husband can hire someone and pay her 40,000.00 to act as a nanny to my kids. The best company is Zander insurance. They are endorsed by Dave Ramsey. And you will get the best prices with them.

Lisa

You couldnt have enough..... you, in the household, are irreplacable :)

Meet with a financial planner, a good one. Someone from a reputable company won't charge you for meeting, and finding the right amount is actually dependent on a lot of different things, not just income. Northwestern Mutual is a great company, but you can also check out New York Life or USAA.

Good luck!

Talk to an experienced broker/financial planner. They are the best ones to go over your assets, your monthly expenses that need to be replaced, etc. Even though you aren't bringing home any income, what you do is important.
If you own your own home, be sure to ask about the rider that pays your home off in the event either spouse passes away. That alleviates the worry of losing the house.
I know wonderful financial planners, but none in TX, unfortunately.
You should speak to a professional. Or several, so you can make an informed decision.
In California, there is no fee to speak with an insurance agent who is also a financial planner.

I hope you get some great suggestions closer to you.

Best wishes.

We use Farm Bureau and I just got the same amount as my spouse (just got it last month). We were told life insurance is a better way of "saving" for your children and they won't have inheritance tax upon death and won't have to wait for the will to be finalized.
So as others said, talk to a reputable insurance agent-maybe even 3 or 4 to find out what they all say. You are not obligated to buy and as salespeople, they know this.

The amount really is based on what your family's lifestyle would be like if something happened to you. Some kids at your age can help with the cooking and cleaning and wouldn't need a housekeeper, but others would need a lot of help. You want to make sure you have enough but you don't want to over do it.

Here are my thoughts:
The cost of a funeral and possible medical expenses not covered by insurance; plus
the cost to hire a nanny (or other child care services) to do what needs to be done to care for your kids if you aren't here; plus
the cost to pay a maid service or laundry service once or twice a month until all the children are 16 or older.

Add all that up, and if you make your policy that amount or more, it would probably be sufficient. The amount of your husband's income is irrelevant... he would still be earning it, unless he becomes a SAHDad upon your death. Maybe that is something you two should discuss while discussing the amount of benefit for a policy for you.

There is a life insurance calculator at www.mwaquicklife.net . Its not perfect, but it should give you a good idea. They have reps that will call you to answer whatever you need.

If something happens to you, your husband will need daycare for the kids, someone to drive the kids to and from school and preferably a nanny that can help in many of the ways you care for your family now. I have 500,000 on myself and would like to purchase more when I can afford it.

I see you have a lot of good answers already. Many people think that because they stay at home they don't need insurance on themselves and only on the breadwinner. Remeber that he will need help taking care of the kids if you're not there. He'll probably take some time off of work also until everything is situated. I personally have 500k on myself and I stay at home.

No less than $500K. I'd go for $1M.