Affordable Life Insurance Policies for Parents
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UPDATED: Aug 13, 2020
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If you are a parent, your children are your most cherished possessions in your life. That is why getting a life insurance plan for parents to protect your children in the event of your death should be a high priority. If you are a single parent, this can be a little more challenging as there are many high priorities competing for your income. That is why obtaining an affordable life insurance plan for you and your children is of the utmost importance.
The Value of Life Insurance for Parents on a Budget
When you are choosing between satisfying the immediate needs of you and your child versus the possible future needs-the choice is clear. Rent or mortgage, bills, groceries and health insurance premiums are probably higher on the priority list than a life insurance policy. But life insurance policies do play an important role in providing these same necessities for your child if you die an untimely death. Therefore, it is still important to attempt to maintain an affordable life insurance plan for your family. If your budget is still too tight to purchase a life insurance policy, check to see if your employer offers an inexpensive group policy that fits into your budget. You could also look into an inexpensive term life insurance policy to provide a benefit during the years your child would need it. In addition, you can look into your fraternal and union groups to see if they have an affordable life insurance option.
How Much Life Insurance Should a Single Parent Have?
Single parents have unique concerns to consider when determining how much life insurance they should buy. Here are a few things to consider before you get a quote for life insurance:
- Where the child will live if you should die? Will they live with someone who can afford to support them or will their presence bring about financial strain?
- What will your child need after you die? Education and college tuition, clothing or medical costs, food and other necessities like daycare when they are young. Are they likely to be in the band or need music lessons? How about activity cost. Calculate the cost of all the things that you would have provided, and find the best plan for your child’s needs. You might want to make the future guardian the beneficiary or create a trust that the guardian can draw from to pay for these expenses.
- What are your child’s future needs? Life insurance can provide for financial planning, and you could use some of your death benefit to set up a trust fund so that the death benefit continues to provide for them long after you have passed.
According to most economic enthusiast, it takes an average of $200,000 to raise a child from birth to eighteen. Multiply that number for each child you have. This number can be daunting as if you have two or more children, this could easily add up to close to a million dollars!
Finding an Affordable Life Insurance Plan
You might be thinking, that you can’t afford that much insurance because of your budget. However, there are many affordable term policies that could fit your budget depending on your age and your health. Term life insurance policies will offer your children the financial assistance they need should you pass while keeping your premium payments low. If you have any questions, ask a professional insurance agent for assistance.
If you find that you cannot afford the amount of insurance that you feel you need, get a quote for an amount lower. Get quotes on different amount of death benefits in multiples of $50,000 so you can see the difference in premium as you go up in death benefit. Buy an amount you can afford. Something is better than nothing when it comes to protecting the future of your children.
TIP: Life insurance for parents is very important because of your children’s needs. If you think you cannot afford it, speak with a life insurance agent to see if you can fit some form of insurance into your budget.
Life Insurance on the Other Parent
Determine how much life insurance you should place on your life is one decision, however, obtaining life insurance for the other parent is an entirely different issue. In order to take out a life insurance policy on the other parent, you will need to demonstrate you have an insurable interest. This means you have to show that you rely on them for financial support. If you are not married to your child’s other parent, obtaining life insurance on their life requires their permission and signature. It’s natural to be concerned about the welfare of your child and therefore quite natural for one parent to ask the other to help provide for them in case of death.
If the other parent has a concern about making you the beneficiary of the life insurance suggest that they or you together set up a life insurance trust. That way, the death benefit proceeds can go to the trust and be directed by the designated trustee or beneficiary of the trust. Again, each month a certain amount can be paid out for the care of your child and then if you desire, a lump sum to the child at a certain age. How you set this up and for how long can all be discuss with an attorney skilled at setting up a life insurance trust.
If you are concerned about the likelihood of the child’s other parent keeping the policy current, you may be able to have certain life insurance requirements built into a custody agreement. If no custody agreement exists, consider paying the premiums if affordable. Doing this will ensure the care of your child in the event of death. Again, this requires the permission of the other parent.
Life insurance is important if you are a single parent. Purchasing affordable life insurance now will ensure the proper care of your children later. Shop for life insurance quotes and find one that fits your needs and your budget. To get a quote on affordable life insurance today, click here.
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