Term Life Insurance: What Single Parents Shouldn’t Be Without!
Life insurance serves to replace your income in the event of your death, so that your spouse or children are able to survive financially in the wake of your passing. Life insurance is especially important for people who are the main moneymakers in the family, especially those with young dependents.
Why, then, are single parents less likely to carry life insurance? A recent study suggests that nearly 70 percent of single parents do not have a life insurance policy, despite being the sole source of income for their young children. Worse yet, the study also determined that the more children a parent has, the less likely she or he would be to carry life insurance.
Why Don’t Single Parents Carry Insurance?
Most uninsured parents have chosen to forego insurance costs so they can use that money on other things, like paying off debts. With the economy as troubled as it is, many people are choosing to put every penny that they can into savings or debt; other people need to spend everything that they make just to break even.
Some parents may also be relying on alternate sources of income, like child support or Social Security survivor benefits. Unfortunately, these benefits aren’t a sure bet. The only way to guarantee that your children will be covered after your death is by preparing for that inevitability yourself.
Parents Need Insurance
Some groups of people don’t need life insurance. Bachelors with no dependents, for example, don’t need life insurance. Elderly people whose children are already grown and independent also do not need insurance. People who are responsible for the lives of dependents, however, always need insurance.
Many single parents don’t want to think about the possibility that they may die unexpectedly. The likelihood is that you will live a long time and your insurance will be unnecessary. In the event that you are in an unexpected accident, however, knowing that your kids have financial security is well worth the investment.
What to Consider when Buying Life Insurance
Term life insurance is cheaper than ever before. Essentially, a term life insurance policy covers you for the pre-specified term, like 10, 25 or 30 years. If you die any time during that term, your beneficiaries will receive the full amount of the policy. If you survive to the end of the term, you will need to purchase a new policy. It is important to compare term life insurance among different companies to make sure you get the most affordable policy available.
Before buying insurance, you should determine how much coverage you need. Usually, you will want to purchase six to 10 times your yearly salary in insurance. You may also want a larger policy if you want money to go toward paying off your mortgage or providing a college fund for your children.
Bear in mind, however, that if you survive your insurance term, you will receive none of the benefits of your policy. You might be better off buying the minimum of life insurance you need in a term policy and investing the rest in an interest-bearing account.
{This helpful financial planning advice was brought to you as part of a sponsored guest post program – But I only share information that I think you’ll be interested in. I agree fully with the recommendations presented by my guest poster!}
