Purchasing a life insurance policy is a smart idea for any family. But in single-parent households, the need is even more important.
In a 2022 study from Life Happens,1 two in five parents said they are “barely” or “not at all” financially secure. And when it comes to losing the primary wage earner, the same study found 44% of families would feel financial hardship in less than six months.
As a single parent, you are both the sole financial provider and primary caretaker for your children. So purchasing life insurance is a great way to make sure that your children can continue to enjoy the lifestyle they have – even if you pass away unexpectedly. Think of it as an added layer of protection that can help your family move forward without facing financial hardships in the process.
How Can Life Insurance Help the Children of Single Parents?
Single parents know all too well that the costs of day-to-day living can add up fast. With life insurance from Erie Family Life, your policy’s death benefit can cover a range of expenses to protect your children when you’re gone. This includes:
In the event something should happen, you may have already identified a guardian for your children in your will (If you don’t have one, check out our guide to writing a will). The role of this guardian is to care for your children until they reach adulthood. But with the cost of raising a child estimated at more than $300,000, the new caregiver for your children will likely need some financial assistance. A life insurance policy can help your child’s guardian with those costs, making sure their essential needs are taken care of until they reach adulthood.
If you’re like most people, you probably have a car payment, mortgage or student loans. If someone has co-signed any of these loans for you, they might be responsible to repay them in the event of your untimely passing. Having life insurance can ensure that no one else becomes accountable for your debt. That includes consumer debt like credit cards, personal loans or medical bills.
The cost of a modest funeral currently ranges between $8,000 and $10,000. That can be a big burden during a difficult time – forcing your family to cover the expense or resort to crowdfunding. A life insurance policy can help fund your funeral arrangements and final expenses, allowing your family to grieve without worrying about the bill.
What Life Insurance Options Are Available?
When it comes to life insurance, the two most common types of policies are:
Term life insurance: With term life insurance, you’re covered for a specific number of years, and you determine how long the “term” will be. If you live beyond that time frame, your coverage expires and no benefit is paid.
Whole life insurance: Whole life insurance offers coverage for your entire lifetime. With this type of policy, your family and beneficiaries are often protected for the duration of your life and the policy is paid upon your death.2
Many people consider whole life insurance as part of a long-term protection strategy. That’s because some policies accumulate cash that you can borrow against, if needed.3
But for single parents, term life insurance is a popular choice. With this type of policy, you can select a term that will cover you when you need it most — such as the time it will take your children to reach adulthood. Term insurance also generally allows you to purchase more coverage for a reasonable price. This limited term makes it a cost-effective option to protect for the loved ones you leave behind.
Despite the compelling reasons for having life insurance, nearly 70 percent of single parents with kids living at home are not covered by a life policy. Sometimes it’s simply because they aren’t sure how much life insurance they need or how to make sure they choose the right coverage.
If you have questions, we can always help you find quality, affordable life insurance coverage that fits your life and budget. But in general, your life insurance policy should line up with the financial obligations you’ll want to cover. This can include the cost of household expenses for your children until they reach adulthood, as well as any outstanding debts and funeral expenses. And if you want to help your kids pay for college, include that amount, too.
If you’ve decided to buy a term life insurance policy, you’re probably wondering “how long should my coverage last”? The answer: It depends on your unique life situation. That’s why ERIE offers a range of term life insurance options, including 5-, 10-, 15-, 20- and 30-year plans.
As a single parent, you should select a term that lasts as long as your children will depend on you financially. Your insurance agent can help advise you on specific coverage amounts and years that may be right for you and your family, based on your specific needs and requirements.
How Much Does Life Insurance Cost?
While buying life insurance may sound intimidating to some, a term life insurance policy is more affordable than you might think. For example, a healthy 35-year-old man could pay less than $18 a
month for a 20-year, $250,000 term life insurance policy from ERIE.4
And with ERIExpress Life, you can get the protection you need through a simple application process – with no physical medical exam5 and a faster approval time. Your life insurance coverage can be effective the same day as your application, and an Accelerated Death Benefit rider is automatically included.
Looking for more ways to save? ERIE also offers multi-policy discounts depending on the state where you insure your auto and home with us.6 Just ask us about how much you could save when you add a life policy.
Who Should I Name as My Life Insurance Beneficiary?
A beneficiary is the person or entity designated to receive the funds from your life insurance policy in the event of your death. It’s a big job, which is why it’s important to choose the right person – someone who’s trustworthy and knows what matters most to you.
If you’re purchasing life insurance to help support your children, keep in mind that minors cannot legally accept life insurance payouts. So if you name a minor child as a beneficiary, you should also name a guardian – someone who can manage the insurance funds until they turn 18.
If you don’t want to name a guardian, you can always name your estate or living trust as the beneficiary, then include instructions on how the insurance money should be used. But when it comes to estate planning and wills and trusts, you should always consult a legal and or tax professional. For more information, read our blog post on How to Choose a Life Insurance Beneficiary.
There’s No Better Time
When it comes to life insurance, the only wrong decision is not having any. At Erie Family Life, we can help you find out how much life insurance you need – and how little it will cost – in just a matter of minutes. Ready for a quote? Contact us for guidance in creating the best life insurance plan to fit your needs.
ERIE® life products and services, provided by Erie Family Life Insurance Company, based in Erie, Pennsylvania, a member of Erie Insurance Group, are not available in New York. The rider is available in conjunction with a qualifying life policy. See individual policies for specific coverage details. Certain terms and limitations may apply. Refer to our disclaimer for additional information.
ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York). The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.
The insurance products and rates, if applicable, described in this blog are in effect as of July 2022 and may be changed at any time.
Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions.
The insurance products and services described in this blog are not offered in all states. ERIE life insurance and annuity products are not available in New York. ERIE Medicare supplement products are not available in the District of Columbia or New York. ERIE long term care products are not available in the District of Columbia and New York.
Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.
Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.
A better insurance experience starts with ERIE.
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Contact May Insurance today to experience the ERIE difference for yourself.