Being a single parent is a challenge on many levels. Not only are you solely responsible for your child’s care, but you may have to juggle work and parenting responsibilities without any kind of help or support.
The number of single-parent households in the United States has increased by 40% since 1980, according to the Census Bureau. But only 41% of single mothers have life insurance, which is a lower percentage than the general population, according to LIMRA data.
Of course, one of the biggest reasons so many single moms go without life insurance probably comes down to cost. Thanks to the pervasive gender pay gap, women still generally earn less than their male counterparts. And it’s easy to see how lower incomes could force women — especially single mothers — to have to save money.
But if you are a single mother, it is extremely important that you purchase life insurance. Without coverage, it’s hard to say what might happen to your child(ren) in your absence. And if cost has been a barrier to getting life insurance, there’s an option worth considering.
A more affordable option
Life insurance comes in different varieties. If you purchase whole life insurance, you will be covered permanently and your policy will accumulate cash value over time. This cash value is something you may be able to tap or borrow down the line.
But despite this advantage, whole life insurance presents a very big challenge – it is extremely expensive. Term life insurance, on the other hand, tends to come with much lower premium costs. And there is a reason for that.
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Term life insurance will not cover you permanently like whole life insurance. Instead, you’ll get coverage for a specific number of years. You also won’t see your term life insurance policy accumulate cash value. If you do not die while your coverage is in place, you will not receive payment from your insurance company.
Still, if you’re a single mom on a tight budget, term life insurance might not only be a better choice, but your only financially feasible choice. And it’s better to buy some coverage than not to have it.
Also, you may find that term life insurance more than meets your needs. Let’s say you have a 5 year old and you are looking for a way to protect him into adulthood. If you were to purchase a 20-year term life insurance policy, you would have coverage until your child’s 25th birthday. At that point, it’s reasonable to assume that they could go out and find a full-time job to be self-sufficient.
Don’t leave without cover
As a single parent, you may be used to having to cover 100% of a child’s education costs. But if you die, that means your child risks losing 100% of their financial support. It is therefore very important to take out a life insurance policy if you have a dependent who does not have another relative to rely on.
Our selection of the best life insurance companies
Life insurance is essential if you have dependents. We’ve combed through the options and compiled a list of the best life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.