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Life insurance is like a parachute. Does your spouse have one?

Will you have it if you need it?
Will you have it if you need it?Photo by Thananuwat Srirasant/Bongarts/Getty Images

Think about it. Life insurance IS like a parachute. If you don't have one when you need it, chances are you won't need one again. You don't get a do-over if you're dead. Your life insurance "parachute" replaces your income. It can continue your family's lifestyle, keep your kids in their schools with their friends, even provide funds for college and retirement. Got a policy? Great! At least your family will have some protection if you suddenly become room temperature. But what about your spouse?

If your spouse is working outside the home, chances are that there is some employer-provided coverage. Not much, but some. But if your spouse is a stay-at-home mom or dad, have you considered the possible devastation of his or her death? Sure, there's no income to replace. However, there still is an enormous financial benefit that must be replaced. Do you hire a nanny? A maid service? A chauffeur? A personal grocery shopper? No, you say. You can do it yourself, you say. Does your job allow for extended periods of time away to deal with these issues? And let's not forget the cost of raising a child. According to CNNMoney (http://money.cnn.com/2014/08/18/pf/child-cost), the cost of raising a child born in 2014 is estimated at $245,000!

Steve Scalici, writing for CBN.com (http://www.cbn.com/finance/scalici_spouseinsurance.aspx) tells the story of John, a 39-year old small business owner whose wife was killed by a drunk driver. John was a smart businessman and a loving father to his 2 children. However, he made a terrible mother. He couldn't be there for his kids when they got out of school. With no supervision, the kids began making wrong choices, forcing John to move his business into his home. Unfortunately, he couldn't focus full-time on both his business and his kids, and, realizing this, gave up his business for 3 years in order to give his kids the attention they warranted. The good news is that John had enough savings to allow him to do this. The bad news is that he went through virtually all of it, which created financial havoc. Eventually, he re-opened his business, and is regrouping.

Had John's wife had her own life insurance parachute, John could have protected his children's quality of life, perhaps provided for someone to be in the home for them, to help them adjust. His savings would have remained protected, and he could have continued with his business. By being there for them, some of the problems may have been eliminated. With no spousal coverage, John had to spend down his savings, forego his business, and drastically change his family's way of life for 3 years.

Consider the financial hardship the death of your spouse would cause. Don't ever think for a moment this can't happen to you, because if it does, will you be prepared? Make sure the mother or father of your children is sufficiently covered.