When it comes to life insurance, many couples only think about insuring the family's primary breadwinner. The thought process makes sense. Losing a family's main income earner can cause all sorts of financial hardship. But amidst these conversations, there's another factor to consider: What happens if the family's primary caregiver—the partner who watches the children or takes care of other dependents—passes away?

"It's much easier for people to account for the income number of the primary breadwinner than it is to quantify the true financial value of a stay-at-home spouse," says PNC Financial Planning Manager Madison Sharick. But assessing that value is vitally important, especially as you're establishing insurance safety nets that prevent tragic events from also becoming financial catastrophes.

A stay-at-home spouse provides an invaluable service to a family, caring for children and often spearheading domestic work and organization that keeps a family functioning. As you contemplate life insurance, be sure to consider the monetary value of the stay-at-home spouse's labor and what it would take for your family to replace it.

The value of care

About one in five U.S. parents stays at home to care for family, a figure that's remained relatively unchanged since 1989[1], according to the Pew Research Center. While most are caring for small children, a growing number are also caring for elderly parents. Given the high cost of childcare and assisted living, having a parent at home to provide that care saves a significant amount of money and enables the spouse that works outside of the home to earn an income for the family.

"If all of a sudden the primary breadwinner has three young children at home and no childcare provider, that becomes a significant expense," says Georgia Phillips, PNC's territory sales executive. "Paying for that care may impact the family's lifestyle—aside from the possibility of not being able to pay for ordinary monthly bills, maybe they have less disposable income for vacations or less money to save for the children's college."

The same idea applies to the loss of a partner caring for elderly parents or grown children with disabilities. A 2018 Pew study[2] found that 12% of parents with children living at home were also caring for a dependent adult. Replacing that care with an assisted-living facility or hired caregivers can be cost-prohibitive.

Planning for peace-of-mind

The first step in determining how much life insurance and what type of protection makes the most sense for your family is to create a comprehensive financial plan. As part of the process, a financial advisor can walk you through a thorough needs analysis, which assesses each spouse's capital needs and available assets should the other person pass away.

To evaluate how much life insurance is appropriate for the caretaking spouse, an advisor would review the surviving spouse's immediate financial needs as well as future goals and expenses. Contrasting this with the couple's current assets will reveal potential gaps. Life insurance can fill an anticipated shortfall, minimizing the additional sacrifices that families may have to make.

Advisors recommend that couples also consider long-term care insurance, which can cover the cost of assisted living facilities, in-home care providers and more. "Most people think about long-term care insurance when they're not insurable," Phillips says. "The time to look is when you're healthy." And with the median monthly cost of assisted living exceeding $4,000, protection can prevent the healthy spouse from spending down savings to care for their ill partner.

Conversations for today

Talking about life or long-term care insurance isn't anyone's favorite topic. But sooner than later is the best time to address these difficult issues. Life milestones—from a new marriage to the birth of a child to a career change—present ideal opportunities to discuss how to protect your family.

Financial advisors can help facilitate the conversation by asking questions, providing context and, of course, offering guidance that fits within your family's financial means and goals. Providing care for children and dependents is one of the most significant contributions a partner can make to their family.

"A penny saved is a penny earned," Sharick says. "The amount of money a family saves from not paying for childcare should be thought of as money earned—and you want to account for that in your financial plans."

Connect with a PNC financial advisor to learn more about life and long-term care protections that make sense for you.

PNC is proud to offer insights, education, and support to female financial decision-makers. Visit pnc.com/women to learn more.