When you're estimating Life Insurance needs, overlooking or underestimating the economic value of a spouse who chooses to stay at home and care for the children is easy. After all, how do you determine the Life Insurance needs of a homemaker?

I have no ironclad rules for this. So much depends on the surviving spouse's preferences. How much cooking, cleaning, and laundry do you want to do when you get home from a hard day at work? Do you want to hire replacement care for your children in your own home, or do you prefer to haul them to a daycare provider? Do you want the freedom to work fewer hours and a more flexible schedule to be able to attend the special events in their lives?

When insuring a homemaker, buy enough Insurance to give the surviving parent the option of paying for the nicest and least stressful "replacement"—a full-time, in-home nanny.

And give the surviving spouse the economic freedom to choose if he so desires to soften his work schedule to be there more for the kids. One way to do that would be to buy enough Life Insurance to both hire a nanny and pay off the mortgage and all other debt.

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From Insurance for Dummies © 2001 by Wiley Publishing, Inc. © 2000 Text and Author Created Materials Copyright Jack Hungelmann. Used by arrangement with John Wiley & Sons, Inc.

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