Children living with single parents in the United States have tripled since 1960. And are these families covered by life insurance?
According to the recent US Census Bureau report, one of 12 million single parent families and more than 80 percent were headed by single mothers. And unfortunately, 40 percent of that number’s income is at poverty level. Children, without fathers to support them, are more likely to end up in poverty, whether the father is absent due to divorce or is deceased.
Poverty still hangs in the balance with the single mom taking care of her children, childcare costs, household finances, working a full time job and many times supplementing her full-time job with part time work. As one insurance representative comments about being a single parent, you need about a 35-hour day and an extra pair of hands just to keep the household going, the kids fed, the laundry done, the car running and the bills paid. While your friends are off playing on the weekend, you are most likely picking up extra cash at a part-time job. On your day off, you are doing next week’s grocery shopping, cleaning the house or trying to find some time to spend with your children.
And let’s not talk about the cost of college which is averaging approximately $30,000 a year per student.
Though you may be covered by a group life insurance policy, it may cover your final expenses if something tragic happened, but now what? Is that enough? How will your children move forward with no groundwork? As a result of surveyed single mothers, many felt that their children would not be taken care of for any significant amount of time financially. As long as you can stay healthy and work, most of your children’s needs can be met. But do family members have the means to raise your children? What about the legal guardian?
This is where additional life insurance can play a major role and term life is your best option. Term insurance is the simplest form of life insurance. Though whole life can provide cash value, it is more expensive. However, many term policies can be converted to a permanent plan which then can build a cash value after the term limit, which can be 10, 20 or more years. The amount of coverage generally depends on your individual circumstance. However, the rule of thumb is to purchase coverage equal to five to ten times your annual income.
The best way to determine your needs is to talk to a qualified, licensed agent. Ask friends, family or a trusted professional for a recommendation. Even an attorney may offer a reference. A good financial planner will take the time to sit them down and explain the dangers of being uninsured and the potentially negative impact it can have on your children’s lives.