The economic value of a stay at home spouse is remarkable considering the costs of a chauffer, full time nanny, caregiver, cook and social director just to name a few of the many tasks involved. In 2007 dollars, the cost has been estimated at $50,000 per year to replace the basic services of a full time stay at home spouse. In many houses it is substantially more than that. Using $50,000 as the economic value, we can use that number as the “Income” level for our formula (see "How much life insurance do I need." The rest of the formula remains the same. The first time we will use 3x’s and the rest will be based on the actual situation you are in.
Formula for “Stay at Home” coverage:
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3x’s Economic Value (min. $50k)
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+ Mortgage
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+ Debts
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+ 1x’s Economic Value/Child
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Total
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- Less Current Insurance
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New Coverage Needed
© R. Allen Greer, Jr., 2007
