As a stay-at-home mom or homemaker, your life is busy. The days (and nights) can go on and on. You are part chef, teacher, doctor, psychologist, event planner, landscaper, accountant, and much more, all rolled into one. While the days seem endless, many people rely on you, though. Have you ever thought what would happen if you became sick, ill, injured, and disabled? Who could look after the kids or help around the house if you can’t get out of bed? Disability quickly affects your future plans and the lifestyle your family together worked so hard for. In this article, we discuss disability insurance and the best disability insurance for stay-at-home moms and homemakers.
You Are More Important People Than You Realize
We hear from stay-at-home moms and homemakers all the time. When we ask them what the family plan is if they became sick, injured, or disabled? Their response, “It won’t happen to me.” Or, sometimes they respond that because they don’t earn an income, they have no financial worth. John, disability insurance isn’t available because we don’t earn an income. Well, the public doesn’t help, either. Even Dave Ramsey says a stay-at-home mom or homemaker can’t purchase a disability insurance policy. Nothing can be further from the truth. Dave: disability insurance is available on your wife, Sharon.
Look up the comparable salary of any stay-at-home moms and homemakers, and you will see that they are worth over $100,000 annually based on all of the important things they do. So, there is financial worth.
You have to answer the tough questions. What would family life look like if you are disabled? Would your spouse have to work more? Who could watch or be flexible with the children? Would you have the money to hire someone to take care of the kids? Or to do all of the things that you do? The tough questions can go on and on.
Disability is known as the destroyer of dreams. Your future and family dreams could be destroyed. They don’t have to, though. With disability insurance, you have peace of mind knowing that you have a plan – and income – in place should the unexpected happen.
Yes, But It Won’t Happen To Me
I know what you are thinking. John, I am healthy all along. I have nothing to worry about. Really? You think you won’t. However, disabilities strike anytime. They do not discriminate. A sudden car accident, a trip down the stairs, an unsettling diagnosis…all potentially lead to disability and a need to temporarily replace your worth.
The probability of having a long-term disability is anywhere between 1 in 3 and 1 in 4 people. Contrast this to unexpected death, say from a motor vehicle accident, which is 1 in 114. Even dying from cancer has better odds: 1 in 7.
But, John, I’m not going to get hurt or be in a wheelchair, you say. Wow! I respond. If you know that, then you need to play the lottery! You won’t have to worry about income at all!
Joking aside. In all seriousness, when we think of disability, we think of someone bound in a wheelchair, right? Not true and far from it. According to the Council For Disability Awareness, 90% of disabilities are from illnesses (like cancer) than from accidents. That means an illness or condition, such as cancer or a heart condition, has a higher probability of disabling you than a skiing accident. Yes, that is true!
As we mentioned, disability does not discriminate. It does not care if you are a stay-at-home mom or homemaker, a CEO, a firefighter, or an accountant. You need an income plan in place in case you are disabled. Ignore it, and you will have to potentially make some very tough decisions that could affect your family’s financial future.
Just answer this question to yourself: what will you and your family do if you are disabled? If the answer is “I don’t know”, then you probably could use disability insurance.
The Basics of Disability Insurance For Stay-at-Home Moms And Homemakers
Hopefully, you see the importance of disability insurance for stay-at-home moms and homemakers. OK, John. You make great points that I need disability insurance, but I don’t earn an income. How can I get disability insurance?
We will discuss that soon. First, we will discuss some disability insurance basics that you should understand. Before I go any further, let me address the elephant in the room. No, likely, the disability insurance won’t cost a lot of money.
One more thing, I am talking about long-term disability insurance. It is these types of situations which are financially devastating with families. Long-term disability insurance is for disabilities that last for longer than 3 months. Think about that. What would happen if you could not help for 1 year? This is why most financial hardships are related to long-term disabilities.
OK, John, but what happens in the short-term if I am sick or ill? Good question. There is short-term insurance. Short-term disability insurance is for those shorter durations. (Sick with the flu, maybe hurt your hand, etc, that lasts for a month or two.) However. We feel that short-term disability insurance is a waste of money. Really. Rates are usually high because of high claims and benefits are low. What you really need in the short-term is an emergency fund to cover these costs.
Think about it. You and your family could likely get by just fine on a short-term disability. You can have friends and family help out. It will be stressful, but manageable because your disability is only short-term. Could you see your friends and family helping out for 6 months or more? What about money? Likely not. This underscores the importance of disability insurance for stay-at-home moms and homemakers.
Disability Insurance Policy Basics
Sure, you don’t earn an income. Many carriers, however, know how important you are to your family. You play a vital role and can obtain coverage, even if you don’t earn an income.
You probably know that your health matters for underwriting. Carriers also look into industry classifications, too. Most carriers will not cover high-risk professions for the simple reason of an increased probability of disability. Carriers classify the risk from a scale of 1 to 5 or B to 5A. The lower the number or letter, the riskier the occupation, and the higher the premium, all things being equal. Stay-at-home moms and homemakers are typically classified as a 2 or 2A.
There is an elimination period, also known as a waiting period, which is like a deductible. It is the length of time that elapses before disability benefits begin. For example, a 90-day elimination period means your benefit period will begin after 90 days of disability. In other words, your disability benefits begin on day 91 of disability. This means you need to have adequate savings to carry you and your family until benefits begin. A 30 day waiting period is available
The maximum benefit period is 2 years. If you think that is too little of a time period, keep in mind that the average long-term disability is around 2 years. Moreover, what would your family do if you are disabled? Having money come in for two years can go a long way.
The benefits from individual disability insurance policies are income tax-free.
And, the good news. We work with carriers that offer up to $1,000 monthly benefit. Think about that for a minute. That $1,000 can go a long way. It can pay someone to help with the kids, run errands, and help around the house.
What Can I Do With The Disability Insurance Money?
As we mentioned, you can use the insurance money for childcare, household help, medical bills, babysitters and nannies. Really, anything you want. Remember that $1,000 per month can go a very long way, especially in times of need and stress.
What If I Go Back To Work?
Great! The plan we like to work with (more on that) has the own-occupation definition. This means if you go back to work, and disabled, then your disability is based on that occupation. For example, let’s say you go back to work as a teacher. Disability strikes. Your disability is based on your own-occupation as a teacher, not as a homemaker.
And, what if you currently work part-time? Contact us as there are other coverage provisions.
The Best Disability Insurance For Stay-At-Home Moms And Homemakers
You are probably wondering who we like to work with. First, we work with many disability insurance carriers. So, we are sure we can find one that meets your needs and budget.
However, there is one carrier that stands out to us. That carrier is Illinois Mutual. An A- rated carrier, Illinois Mutual operates in the middle-income market. More specifically, it offers a niche product designed for people like stay-at-home parents. Moreover, the premiums are generally very competitive. The underwriting process is simplified. This means no paramedical exam, blood sample, or urine sample required.
Additionally, they offer partial disability benefits without the requirement of total disability. This is an important provision as many disabilities start out as partial. For example, let’s say you develop multiple sclerosis. For all intents and purposes, this condition starts out as a partial disability. You can do things, but you need help around the house. This is where a partial disability provision helps.
And, what about premiums, you ask? Depending on your health and age, the premiums could run anywhere from $0.50/day to $3.00/day. Think that is expensive? Do you or your spouse buy coffee or your lunch almost every day? Yes? What is more important? Having a plan in case of your disability or buying a cup of coffee? There are many ways to afford disability insurance.
We hope now you have a solid idea why stay-at-home moms and homemakers need disability insurance. Confused? Don’t feel that way. We’re here to help educate you and protect your future. Don’t know where to start? Use this disability insurance needs analysis worksheet. Follow the instructions; it is rather easy to fill out (we at My Family Life Insurance try to make understanding insurance easy). Next, feel free to reach out to us for our assistance or a quote. Or, fill out the form below. We only work for you, your family, and your best interests only. We have helped many stay-at-home moms and homemakers secure the right disability insurance for their specific situation, giving them and their families peace of mind.