What All Single Parents Should Know about Life Insurance

There is no denying that it is difficult being a single parent. Though it can be highly rewarding, juggling work, child-rearing, bill-paying and other responsibilities can sometimes be overwhelming. If you are in such a position, know that you are far from alone. A recent report by the U.S. Census shows that as of 2008, single-parent households made up 29.5 percent of all American households with children. The numbers have undoubtedly risen since then.

As parents, we all want what is best for our children. Though it isn’t fun to think about, it is important to consider what might happen to them in the unfortunate event that we meet an untimely demise, particularly when there is not another parent in the picture. Knowing that you have friends or family members who would be willing to take in and raise your children in such a situation is not enough. Life insurance also plays a crucial role in securing your children’s future.

How Can Life Insurance Help My Children?

Nobody expects to pass away during the prime of their life. This is mainly because it is a rare occurrence and one that you need not dwell on too much. However it can, and sometimes does, happen. Over the years, I have seen a number of people posting links to accounts set up to raise money to help the children of single parents who have passed away suddenly. While people can be generous during these times of need, the money raised is typically barely enough to cover burial costs. What do the kids do next?

A sizable life insurance policy can ensure that your children and their guardians have the funds needed for a solid upbringing as well as college or trade school tuition should your children decide to further their education beyond high school. Furthermore, it can give your children a financially secure platform to stand on as they enter into adulthood.

Unfortunately, according to a 2011 Genworth Financial LifeJacket Study, as much as 69 percent of all single parents with children living at home do not have life insurance. Listed below are four common reasons this coverage is not purchased.

I Already Have a Plan for My Children’s Future If I Should Pass Away

You may have already spoken with friends or family members, who have assured you that they would raise your children if anything were to happen to you. However, they may be talking in the abstract and not taking into consideration the large financial burden this could place on them. 

According to CNN’s "Money Magazine," the current average cost to raise a child to adulthood with a middle-class upbringing is just over $245,000. And that does not include the cost of college tuition. By naming chosen guardians for your children in your will and listing them as beneficiaries on your policy, you can ensure that they have the added finances necessary to provide your children with the best possible upbringing.

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I Already Have Life Insurance Coverage Through My Work

If you are fortunate enough to work for a company that provides life insurance coverage as part of your benefits package, that’s great! However, you should not rely on that coverage alone.

For starters, the coverage offered may not be enough to cover the many expenses that your children or family members who are caring for them may face. More importantly, unless you are in a position in which you are tenured or under an airtight long-term employment contract, there is no guarantee that you will still have your job five or ten years into the future.

Employer-provided life insurance policies are no longer valid once you stop working for your company. If, by the time you leave your job, you have been diagnosed with a serious illness or have had other health complications, purchasing affordable life insurance may be difficult, or even impossible. It doesn’t hurt to have a term policy that is portable and have that policy supplemented by a work-provided policy.

Life Insurance Is Too Expensive for My Limited Budget

It is a common misconception that life insurance is overly expensive. While whole life can be quite pricey, a term policy is typically very affordable – especially if you are healthy and a non-smoker. Although term policies do expire at the end of their term, if you purchase a 20- or 30-year policy, by the time it expires, your children should be fully grown and providing for themselves anyway.

Believe it or not, a healthy non-smoker under the age of 30 may be able to purchase a quarter of a million dollars in coverage through a 20-year term policy for as little as $15 a month. Smokers may pay up to twice that amount, so that makes for yet another good reason to quit now. 

In addition to being healthier for you, your life insurance policy will cost you less each month than the cigarettes did. Of course, there are a number of factors that go into calculating a life insurance rate, so it is important to shop around.

I Don’t Have Time to Look into Life Insurance

This is where an independent agent in our  network can really help. You can speak with a local agent, explain your current life situation and get advice about the amount of coverage necessary to secure your children’s future. Your agent can then save you time and money by working with a number of different insurance providers to find you the most competitive quote.

Contact an agent near you to start comparing quotes and to discover how little it can cost to get coverage with a term life insurance policy. In addition to providing for your children in the unlikely event that tragedy strikes, it can also give you peace of mind knowing that your children have something to fall back on if you are not there to help them.