Don’t forget the value of daily tasks on your life insurance policy

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This article is reprinted with permission from NerdWallet. You may not get paid to take the kids to school, do the laundry, or fix the kitchen sink, but the daily support you provide for your family can feel like a full-time job. And hiring someone to handle these tasks in the event of death can be expensive, so life insurance can be helpful.

When calculating how much life insurance you need, you may not think about including these everyday tasks. The breadwinner’s salary is often the focus of attention when estimating a family’s coverage because it is important to replace that income if the main earner dies. But if you underestimate the support services you provide, your loved ones may be left with unexpected costs. The Impact of Unpaid Support Families often overlook life insurance coverage for a stay-at-home spouse, says Mary Beth Storjohann, certified financial planner and founder of viable wealth. However, the value of the services a stay-at-home parent provides often far exceeds the income of the breadwinner, according to Jessica Lepore, founder of Suredered, an artificial intelligence-powered life insurance agency. These tasks can include babysitting, cleaning, accounting, home improvement, budgeting, and maintenance. Also: Is life insurance for children a good investment for them? “A lot will need to be done to compensate that missing person, even if it is not someone with a traditional job,” says Lepore. Knowing how to accurately value your contribution, whether you are a stay-at-home parent or have a part-time job, can help you create a solid life insurance plan for your family. Assessing your coverage needs is asking your partner what life would be like if you were gone, says Storjohann. How would your partner handle day-to-day tasks? Would they have to cut back at work? Should funds be diverted from savings? Answers to questions like these can help you determine how your absence would affect your family financially. When you know which services your family would need to replace, you can calculate the budget to cover each one. “How much would it cost to bring in outside help for those things if you could no longer perform your role?” Storjohann asks. These costs can vary drastically by location. For example, in-center child care can cost twice as much in California as it does in Alabama, according to 2020 data collected by Child Care Aware of America, a research and advocacy group. Also read: The pandemic fueled a trend in no-exam life insurance. Don’t forget the debts you may have. Mortgages are a big trigger for life insurance, Lepore says. If you are a co-signer or co-borrower of a mortgage and help with payments, the other signer would be responsible for all the debt if you died. By having enough life insurance, you can help the other person make mortgage payments without you. If you are the sole owner of the property, the death benefit can help your life insurance beneficiaries pay off the mortgage and keep the home. Once you’ve calculated the financial impact your absence would have on your loved ones, think about how long the expenses will last. Child care may be unnecessary after a few years, while other costs may extend further. It’s a good idea to take a look at your financial impact after big life events, like getting married, having children, or filing for divorce. For example, if your children are older and no longer need child care, you may want to adjust your coverage. Help Is Available If You Need It Calculating your financial impact on others is not easy, especially if you don’t know how life works. insurance works or is financially intimidated. The good news is that people talk more about money and there are places online to learn, says Storjohann. Also read: I took care of everything after my father died. My aunt, who claims she’s entitled to $ 27,000, says I only care about your money. Life insurance policies can last the rest of your life, so it’s good to feel safe when making coverage decisions. If you are unsure, talk to a financial advisor or insurance agent who only pays fees on policy options. “It’s really important to understand that the value of a person’s life is not just their salary,” says Lepore. “What they bring to the table is much more than that.” More from NerdWallet Georgia Rose writes for NerdWallet. Email: