Do you need life insurance for a non-working spouse? This is a difficult question to answer without knowing your age, income, amount in savings, mortgage balance, if there are children involved, and where you are at in your retirement planning. I will list below the circumstances that would as well as would not require a life insurance policy for your non-working spouse.
Yes, Life Insurance Is Needed If:
You have young children that will need daycare and/or a chauffeur.
You don’t have a large emergency fund in place.
You need all of your paycheck for paying bills/ not contributing to retirement.
You have little or no equity in your home.
Your job is somewhat unstable.
If any of those statements applied to your situation the need for life insurance exists. Talk to your insurance agent about the most cost effective term insurance policy available to you. I would have insurance in place until your mortgage is paid off and/or your children are grown and out of the house.
No, Life Insurance Isn’t A Necessity If:
You have no children living at home.
You have a large emergency fund in place (at least 6 months of expenses).
You have a great retirement fund building in a diversified plan.
You’re home is paid off or you have a great deal of equity in it.
You have a very stable job.
If you and your spouse have been on top of your financial planning and are prepared for unexpected events your spouse most likely doesn’t need life insurance. Instead, the insurance that you should be looking into is Long Term Care insurance for both of you. This will protect the money that you have been building in the case that either of you needed to stay in a home for an extended amount of time. You should get a policy in place at the age of 50 to get a great rate.
Protecting yourself and your loved ones is always a good idea. Make sure that you choose the right products for your specific needs. You will have peace of mind while keeping your insurance costs affordable.