Family Life Insurance Plan Options for Single Parents
Purchasing life insurance is important if you’re a parent, but it’s essential if you’re the only parent. If you’re the only financial resource for your children, it’s time to consider a family life insurance plan. Here’s what you need to know about the different types of coverage that are available.
Term Life Insurance
Making ends meet as a single parent can be a challenge, especially when the children are young. Purchasing term life insurance is the best way to ensure the highest possible benefit amount while paying the lowest possible monthly premiums. This is because term life insurance premiums remain level for the duration of the plan, whether the term is 1, 5, 10, or even 20 years. If you only need coverage for a specific period of time – say, while your children are in school – then a term policy may be the right choice for you.
Permanent Life Insurance
Another common challenge many single parents face is building an estate for their children to inherit upon their death. If you’d like to leave a lasting legacy for your children and/or grandchildren, consider purchasing a permanent life insurance policy. This type of family life insurance plan typically has a higher monthly premium than term life insurance, but some plans – for example, whole life insurance – have a cash value option that increases over time. The cash value is kept in a tax-free savings vehicle and is not subject to probate fees upon withdrawal.
Term and Permanent Life Insurance
Another option for single parents is to purchase a mix of term and permanent coverage within a single policy. This allows policyholders to take advantage of affordable premiums while their children are young and benefit from lifetime coverage after the children have left home.
Still not sure which type of coverage is best for your situation? We can help. Contact an advisor to discuss your financial goals and learn more about how a family life insurance plan can help protect your family’s future.