It takes a lot of money to raise a child, and it can get more expensive if you are not around. If both spouses are wage earners and one were to die prematurely, it is unlikely that the surviving spouse would be able to keep up with household expenses and pay for child care with the remaining income. Life insurance is often needed for each spouse. How much insurance may be different for each spouse, depending on how much they earn.

For single-income families, most purchase life insurance to replace the breadwinner’s lost income. However, life insurance is equally important for the stay-at-home parent, who is responsible for caring for the children and maintaining the household. Even though the stay-at-home spouse is not bringing home a paycheck, the daily tasks they perform carry an economic benefit. Salary.com estimates it could cost up to $112,962 to fulfill the many jobs a stay-at-home parent provides.

While a surviving parent may pick up many of the responsibilities, the death of the stay-at-home parent may necessitate day care and housekeeping expenses. As the breadwinner, you may want to reduce your workload to spend time with your children to help them cope with the loss of a parent. Dealing with the emotional toll of the loss may cost you earnings. Life insurance can help provide for this.

You should consider the income gap a premature death would create; what expenses need to be covered and for how long. Some advisers suggest supplementing your surviving family until the children reach college age, while others suggest you provide for your survivor’s lifetime. The amount of life insurance you need depends on a number of factors, including family size; current assets; immediate expenses, such as, burial costs and hospital bills; how much of your salary is devoted to current expenses and future needs; how much you want to leave for special situations, such as funding your children’s education, and often how much insurance you can afford.

A financial projection can help determine the level of appropriate coverage. However, a basic formula for determining your life insurance needs is five times your salary, plus any outstanding debts you owe, such as, a mortgage, car payments, credit card debt, etc., plus cost of health insurance and savings. While this is a starting point, this rule of thumb fails to consider your unique circumstances. Since your needs will change over time, term insurance is usually recommended.

William G. Lako Jr., CFP, is an executive in residence at Kennesaw State University’s Coles College of Business and a principal at Henssler Financial. Lako is a certified financial planner.The MDJ will periodically publish columns from KSU business faculty.