If you're a stay-at-home mom, don't assume that just because you don't "earn an income," you don't need life insurance. You do. But how much do you need?
Figure out what it would cost to replace the services you provide for your family. If you weren't around, how much would it cost to hire a person (or more likely, people) to care for the kids, transport them, do the grocery shopping, act as the family bookkeeper (if that's something you do), etc.? After you figure out how much that would cost each year, increase that number each year by 3 or 4 percent for inflation, and determine how many years you'd need such services. Perhaps until your youngest child is in junior high? Perhaps longer? Also, if your spouse thinks that he would reduce his working hours should something happen to you, you need to factor the need to replace that portion of his income into the equation, as well. The point is, not only are you of critical value emotionally to your family, you're of critical value financially—and you need insurance, too.
About the Author: Jean Chatzky is the financial editor of NBC's Today Show. She writes regular columns in Money, Time, and USA Weekend. And now she's here to help you take control of your finances! Click here to view more of Jean's money tips.
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