As we move further into the 21st century, the idea of the “traditional” American family has changed. The dual income family—with husband and wife each maintaining separate careers and contributing to the financial success of the household—has now become commonplace.

The economic challenges and opportunities of this new century may often require two incomes to meet overall family expenses. Many families are left asking themselves, “How will we be able to plan for our retirement, save for our children’s education, and perhaps help our aging parents deal with some of their financial burdens?” These concerns may be especially pressing given today’s high—and rising—cost of living.

The Cost of Working

Although it may seem that dual income families should have a lot more disposable income to pay for life’s necessities, this may not always be the case. First, families with both spouses working will lose some portion of the second paycheck to extra expenses, such as unreimbursed childcare, domestic help, job-related transportation, business attire and dry cleaning, lunches and dinners at restaurants, and take-out meals. These additional, daily expenses all eat into that second income.

When both parents work outside the home, childcare concerns are especially critical. High quality childcare is a major expense of many dual income families—after housing, food, and taxes. It is this cost that potentially reduces the income that could be used to help fund education or retirement.

Second, as American businesses continue to restructure and downsize, some dual income families may face the possibility of living on a single or reduced income for some period of time. For those who need the additional income to assist in paying for basic expenses—such as the mortgage, food, and clothing—a loss or reduction of one income could have a serious impact on the family finances.

Protecting Your Family’s Future

How would your family protect its income if either working parent should die or become disabled? One solution may be to purchase a life insurance policy that will pay a death benefit upon the death of the insured spouse. There are several advantages to life insurance plans: For example, policies bought at a younger age may have lower costs, provide cash value buildup, and maintain level premiums.

Generally speaking, the cost for life insurance policies may be lower when purchased relatively early in life. However, the protection that life insurance policies provide for dual income families can best be calculated by analyzing all life insurance needs in order to determine the best plan for the family.

Now, what about loss of family income due to disability? This possibility is not as unlikely as you might think. According to the Insurance Information Institute (III 2013), 43% of of all people age 40 will have a long-term (lasting 90 days or more) disability event by age 65. A debilitating illness or injury that cuts off or reduces your family’s primary source of income can be a financially devastating experience. It could be worthwhile to see if using an individual disability income insurance policyto replace those lost dollars would be right for your needs.

It Takes Two

Dual income families have become a fixture in today’s society. Although individuals may have a variety of different motives for working, most families come to depend on that second income, whether it is used to meet current or future needs. Thus, it is important to be certain that the incomes contributed by each spouse are protected from loss.