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Why do stay-at-home mums need life insurance?

Updated: May 18, 2018

For those who have never experienced before, stay-at-home mums seem to have the perfect life, where they just need to stay home and wait for their spouse to be back. However, this cannot be further from the truth. It is actually one of the most tedious job in the world. Not only are they responsible for every detail of the tiny human’s life; they take on multiple roles to ensure that the kids are well taken care of, bills are paid on time, clean pressed clothes for everyone at home, meals to fill the hungry stomachs and the list goes on.

You often hear stay-home mums say “My husband is the sole breadwinner in the family so it is important to get him covered.” However, only getting life insurance coverage for the primary breadwinner of the household is a misconception.

According to the labour workforce survey released by the Ministry of Manpower, the labour force participation rate (LFPR) for women is approximately 60%. This means there is 40% of women in Singapore as compared to 25% of men providing a service to their loved ones that is both invaluable and, yet, somewhat hard to quantify.

Have you ever wondered just how much is the cost to replace a stay-at-home mum? In 2017, the median monthly income in Singapore was S$4,232, according to Manpower Ministry data. This means that the average stay-at-home mum is giving up S$4,232 monthly in order to take care of her children. In a span of 20 years, this is about S$1 million dollars with value equivalent to a brand new condo in the suburbs. Considering that stay-home mum is a 24/7 job, this is only a fraction of the income. However, the more important issue that needs to be addressed is how to ensure your family is financially protected if that person were no longer around.

Financial Contribution Of Stay-at-home Mum

As reported by the Straits Times, childcare operators charged an average fee of $1,011 a month for full-day childcare amounting to $12k per annum. If one day, the stay-home mum pass away without life insurance, getting the spouse or guardian to pay an additional $1k per month will be a burden. This is equivalent to shaving 25% off the income for someone that is drawing the median monthly income and this only covers the portion of childcare.

Why Is Life Insurance Necessary For Stay-at-home Mums?

Life insurance is meant to protect your loved ones financially. Although stay-at-home mums does not bring home an income, they do a lot of work at home which saves cost! If the workload of stay-at-home mum is valued at more than $60,000 a year, this is still a significant financial hit for most families. The spouse would need to take care of all of the workload of the stay-home mum and still work full-time in order to pay the bills.

Life insurance can greatly benefit a family that is going through a very difficult period of adjustment after the loss of a parent. In general, it is recommended for one to cover up to ten times your annual income. However, for stay-home mums, instead of replacing your income, you should replace the value of your workload. The daily task of stay-home mum includes being a caretaker, chauffeur, housekeeper, tutor and cook. In addition to these, if the stay-home mum was no longer around, the spouse is more likely to eat out more and buy expensive convenient foods leading to increased expenses.

It is likely that most couples do not see the potential repercussions of not insuring the stay-home mum. However, taking life insurance for the spouse that works at home is as important as taking insurance coverage for the main breadwinner.

How Much Life Insurance Do You Need

The amount of coverage is greatly dependent on the number of children you have and expect to have, the breadwinner’s salary, health of the parent and liabilities. Just as each stay-home mum is unique, there is no one-size-fits-all solution. You can always speak to a financial advisor to review your situation and derive a coverage that is suitable.

Life is full of surprises – both good and bad. Insurance will never be able to compensate for the loss of a loved one, or replace their role in the family, but it can help reduce the financial burden by providing you with funds to ensure you and your family are not left in the lurch.

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