How Much Life Insurance Do Single Parents Need?
It’s important for any parent to have life insurance, but it’s vital when you’re raising children on your own. However, Genworth Financial reports a frightening statistic – 70 percent of single parents do not have life insurance. Whether you’re looking for a policy or want to ensure you have enough coverage, there are three questions you should ask as a single parent with it comes to life insurance.
How Much Life Insurance Should I Have?
As a single parent, you need to ensure your policy will cover all expenses for your children if ever you’re not around. Typically, parents should have a life insurance policy that covers five years salary. So, if you make $50K a year, your policy would be for $250K. As a single parent, however, you will want to plan for more coverage, especially if you have young or multiple children.
Some costs to consider when purchasing a life insurance policy:
Lost income for essentials (Your salary for five years for each child)
Child care: Whether your children go to daycare or you have an in-home sitter, ensure that your policy will cover the expense so that your children will not have to be removed from familiar surroundings.
Education: Most parents consider college the only educational expense, but that’s not always the case. If you children attend private school or are involved in sports, the money will be needed immediately to cover current costs.
Final expenses: Don’t forget about the cost associated with your final expenses and any debt you leave behind.
Who Will Care For Your Children?
When you purchase a life insurance policy and create your will, decide on a financially stable and trustworthy adult who will care for your children in the event of your death. If the selected guardian makes enough money to provide for your children, your policy will need to supplement their salary. If the guardian doesn’t make enough each year to cover expenses of your children, your policy should completely provide for the children.
When Do My Kids Receive My Life Insurance Benefits?
When you obtain a life insurance policy, name a trust as your policy beneficiary if your children are young. Minor kids cannot receive life insurance benefits, so a trust will ensure the benefits are given to your children according to your directions. You can also set up the policy so that your children receive a portion of the death benefits when they are of legal age.
Single parents are very busy, but taking a few moments to obtain an affordable quote for life insurance means your children will be taken care of even if you aren’t here to provide.
