Insuring a stay-at-home parent by pricing the work they do

A parent who does not earn a paycheck still produces something a household would have to buy if that parent died: supervised children, meals, rides, clean laundry, and someone who remembers that the pediatrician appointment is Thursday. This worksheet prices that work one task at a time, adds up the years the children will need it, subtracts what the surviving parent can realistically take on, and ends with a coverage amount you can defend. Every dollar figure below is an invented illustration, not a market price, so replace each one with a quote from your own area.

Why price the work instead of using a rule of thumb

Rules of thumb tie coverage to income, and a stay-at-home parent has none. Multiplying zero by ten gives zero, which is plainly the wrong answer. The opposite mistake is just as common: picking a round number such as $250,000 because it feels like enough, without knowing what it covers.

Pricing by task has three advantages. It makes the need visible to both parents, which is useful if one of them thinks of the household work as "not really a financial contribution." It shows how the need shrinks as the children grow, which tells you how long a term policy has to last. And it exposes the pieces the surviving parent could absorb, so you do not buy coverage for work that would never be replaced with paid help.

It is not the only method. The guide on human life value: the economist's way to size coverage values a person's future economic contribution in a more formal way, and life insurance for stay-at-home parents covers the general case for insuring a parent who is home. A companion post, putting a number on a stay-at-home parent's work for coverage purposes, looks at how to think about the number itself. This one is the working sheet.

Step 1: list the tasks that would need an owner

Write down everything the at-home parent does in a normal week, then keep only the tasks that would still exist and would need someone if that parent were gone. A five-task list is enough for most families:

1. Childcare and supervision. Hours when a child needs an adult present: before and after school, school holidays, sick days, summer.
2. Transport. School runs, practices, lessons, medical appointments.
3. Cooking and meal planning. Shopping, preparing and cleaning up after meals.
4. Cleaning and laundry.
5. Household management. Paperwork, scheduling, school forms, insurance and bill handling, returns, repairs coordinated with tradespeople.

If your family has other recurring jobs, such as caring for an elderly relative or running a home-based side activity, add rows. If a task would simply stop, remove it.

Step 2: choose the years that matter

Costs are not constant, because a four-year-old needs a full-time adult and a sixteen-year-old mostly needs a ride and a dinner. Pick an end date: usually the year the youngest child is independent, meaning around 18 or the end of high school, though some families choose the end of college or a different date for a child with extra needs.

Our hypothetical household, which we will call the Reyes family, has a stay-at-home parent, Jordan, and a partner, Sam, who works full time. Their children are 7 and 3. The youngest reaches 18 in 15 years, so the sheet covers 15 years, divided into three phases because the weekly workload changes:

• Phase 1, years 1 and 2: the youngest is 3 or 4, not yet in school full days.
• Phase 2, years 3 to 10: both children are in school; the youngest is 5 through 12.
• Phase 3, years 11 to 15: the youngest is a teenager, 13 through 17.

That is 2 + 8 + 5 = 15 years.

Step 3: estimate weekly hours for each task in each phase

Be honest and specific. Count the hours a hired person would need to cover the task, not the hours it takes the at-home parent, who often does several things at once. Here are the Reyes family's estimates:

The hourly rates are placeholders the family chose for the illustration. Real rates differ a great deal between cities and between a licensed daycare, a nanny, a neighbor and a part-time house cleaner. Get two or three local quotes for each row before you trust the result.

Step 4: price each task, week by week

Multiply hours by rate, then add down each phase column.

Phase 1 weekly cost

• Childcare: 35 hours x $16 = $560
• Transport: 6 x $18 = $108
• Cooking: 10 x $17 = $170
• Cleaning: 8 x $18 = $144
• Household management: 5 x $24 = $120

Total: $560 + $108 + $170 + $144 + $120 = $1,102 a week.

Phase 2 weekly cost

• Childcare: 12 x $16 = $192
• Transport: 5 x $18 = $90
• Cooking: 9 x $17 = $153
• Cleaning: 7 x $18 = $126
• Household management: 4 x $24 = $96

Total: $192 + $90 + $153 + $126 + $96 = $657 a week.

Phase 3 weekly cost

• Childcare: 3 x $16 = $48
• Transport: 4 x $18 = $72
• Cooking: 7 x $17 = $119
• Cleaning: 6 x $18 = $108
• Household management: 3 x $24 = $72

Total: $48 + $72 + $119 + $108 + $72 = $419 a week.

Step 5: turn weeks into years and phases into a total

Multiply each weekly total by 52, then by the number of years in the phase.

Add the phase totals: $114,608 + $273,312 + $108,940 = $496,860. That is the cost, at current prices, of hiring out all five tasks for 15 years.

Almost no family would actually hire out everything. The figure is a ceiling, not a recommendation. The next step brings it down to something realistic.

A note on inflation: the sheet uses today's prices throughout, and future prices will likely be higher. In a payout invested at a modest rate, the interest earned over the years partly offsets that. For a worksheet like this one, it is reasonable to ignore both and treat them as roughly cancelling, but say so out loud so that neither parent assumes the number has been adjusted. If you want to model inflation explicitly, the inflation and your death benefit is built for that.

Step 6: net out what the surviving parent would take on

This is the step most worksheets skip, and it is where good judgment matters. Sam would not hire a housekeeper for every hour of every week. Some tasks would fall to Sam, some to relatives, some to the children themselves as they get older, and some would simply be done to a lower standard. The Reyes family decides what share of each task Sam could realistically absorb across the whole 15 years.

First, the 15-year cost of each task, using the same hours and rates:

You can check the first column: $150,592 + $67,392 + $112,268 + $95,472 + $71,136 = $496,860, matching Step 5. The remaining column adds to $112,944 + $33,696 + $56,134 + $71,604 + $17,784 = $292,162.

The percentages are the family's judgment, and they are where the two parents should talk. Questions that help:

• Does Sam's job allow remote work, flexible hours or a shorter commute? A parent who can be home at 3 p.m. absorbs much more childcare than one who travels.
• Are grandparents, siblings or close friends nearby and willing? Count help you are confident of, not help you hope for.
• Would Sam cut back hours or change jobs? If so, the lost income is a cost too, and it can exceed the price of paid care. A surviving parent who absorbs a lot of childcare by working less is, in effect, paying for it in wages.
• What would the older child be able to do at 14 or 16 that they cannot do at 7?

Step 7: add the one-time costs

Ongoing replacement is not the only need. Three one-time items belong on the sheet:

• Transition buffer. In the first months after a death a surviving parent often needs time off work, and few employers pay for it indefinitely. The Reyes family picks three months of Sam's take-home pay, which for the illustration is $5,000 a month, so $15,000.
• Final expenses. The National Funeral Directors Association's 2023 General Price List study put the median funeral with viewing and burial at $8,300, a figure also cited in the what a funeral costs and how families pay for it guide. Costs in your area may be higher or lower.
• Debts and other goals. If Jordan co-signed a loan, or the family has a goal that depended on Jordan's role, add it here. Mortgages are usually handled in the main household calculation rather than here, since they belong to the whole family.

Add: $292,162 + $15,000 + $8,300 = $315,462.

Existing coverage comes off the top. Jordan has no policy in this example, but if there is a small employer-provided benefit through a spouse's plan, subtract it. If you are not sure whether anything exists, read the paperwork before buying.

Step 8: round, then decide how long the coverage must last

Round the total to a sensible number: the Reyes family chooses $325,000. Rounding up slightly is reasonable because the inputs are estimates and the cost of an error falls hardest in the early years.

Next, match the policy to the need. The workload falls as the children grow, so the family's need is largest now and smaller each year. Their choices include:

• A level term life insurance policy with a term of 15 to 20 years. The death benefit stays at $325,000 whenever Jordan dies within the term. This is the simplest option and the usual choice. The guide on how long a term should you buy: 10, 20 or 30 years explains how to pick the length, and the How long a term do I need? can help you test options.
• Layered or decreasing coverage. Because the need shrinks, some families buy one larger, shorter policy and one smaller, longer one. A pure decreasing term insurance policy lowers the benefit by schedule and is more often sold with a loan than as a family-protection product, so check what is actually on offer.
• Permanent coverage. If you also want something that pays regardless of when Jordan dies, that is a separate goal with a separate cost, and not part of this calculation.

Whichever shape you choose, get quotes before treating the arithmetic as a budget decision. The tool at How much life insurance do I need? can cross-check the household total, and a licensed agent or fee-only planner can tell you whether any health factor for Jordan changes the picture.

Test the result with two what-ifs

Before you settle, change one input at a time and see how far the answer moves. Two quick tests with the Reyes numbers:

• Prices turn out 20% higher than assumed. The remaining need becomes $292,162 x 1.20 = $350,594 (rounded to the dollar). That is about $58,000 more than the base case, a reminder to get real quotes for the childcare row, which is the largest.
• Sam can absorb half of the childcare instead of a quarter. The childcare row falls to $150,592 x 0.50 = $75,296, which is $37,648 less than before. The remaining need becomes $292,162 - $37,648 = $254,514.

The spread between those two results, roughly $255,000 to $350,000, is a better description of the family's need than any single figure. Choosing a number near the middle with a small margin is a reasonable way to handle it, and revisiting the sheet when a child starts school or a job changes keeps it honest. The annual review habits described in how to review your life insurance policy every year fit naturally here.

What Social Security may add

If a working spouse dies, Social Security can pay survivor benefits to a child and to a parent caring for that child, depending on the deceased worker's record. But the stay-at-home parent's own record is what governs here, and a parent who has not worked much, or recently, may have little or no survivor entitlement for the family. The guide on Social Security survivor benefits and the $255 death payment explains the rules, and the Social Security Administration can tell you what your household would receive. Do not subtract a benefit you have not confirmed.

A blank worksheet to copy

Use your own numbers in each blank.

1. Years until the youngest child is independent: ______. Split into phases: Phase 1 ____ years, Phase 2 ____ years, Phase 3 ____ years.
2. For each task and phase: weekly hours ____ x hourly rate $____ = weekly cost $____.
3. Phase annual cost: weekly total x 52 = $______. Phase total: annual x years in the phase = $______.
4. Gross 15-year (or your own) total: add the phase totals = $______.
5. Net out: for each task, multiply the task total by the share the surviving parent can absorb. Subtract. Remaining = $______.
6. Add one-time costs: transition buffer $____ + final expenses $____ + any debts $____.
7. Subtract existing coverage: $______.
8. Round, then choose a term length equal to the longest phase you need.

Common ways this goes wrong

• Pricing the at-home parent's hours instead of the replacement hours. A parent who does laundry while watching a toddler is delivering two services in one hour. The replacement bill counts each.
• Treating the figure as precise. The inputs are estimates. A result of $315,462 does not mean $315,462 is correct; it means the answer is in the neighborhood of $300,000, and the family should pick a number with a margin.
• Forgetting the working partner's own coverage. Pricing Jordan's work does not replace the question of how much Sam should carry. If Sam died, the household would lose income and Jordan would have to return to work. See two incomes, one mortgage: which partner should carry more coverage for how to balance the two.
• Leaving it undecided because it feels uncomfortable. The cost of a term policy for a healthy parent is usually small compared with the risk it covers, and quotes are free to request.

Key takeaways

• A stay-at-home parent's work has a replacement cost, and pricing it by task is more defensible than guessing or using an income multiple of zero.
• Build the sheet in phases, because the weekly workload falls as the youngest child grows, which also tells you how long the term should be.
• Net out what the surviving parent can realistically absorb, including the wages a parent would give up by cutting back, before settling on a number.
• Add one-time costs such as a transition buffer and final expenses, subtract confirmed existing coverage, and round with a margin.
• Every figure in this example is illustrative. Replace the rates and hours with your own, and ask a licensed agent or fee-only planner to check the result.