Why do single parents need life insurance?
Buying life insurance is a smart idea for any family. But in single-person 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 that 44% of families would experience financial hardship in less than six months.
As a single parent, you are both the sole financial provider and primary caregiver for your children. So buying life insurance is a great way to ensure your children can continue to enjoy the lifestyle they have – even if you pass away unexpectedly. Think of it as an extra layer of protection that can help your family move forward without facing financial hardship in the process.
How can life insurance help children of single parents?
Single parents know all too well that the costs of daily living can add up quickly. With life insurance from Erie Family Life, your policy̵7;s death benefit can cover a range of expenses to protect your children while you’re gone. This includes:
If something were to happen, you may already have identified a guardian for your children in your will (if you don’t have one, check out our guide to writing a will). This guardian’s role 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 help. Life insurance can help your child’s guardians with these costs and ensure that 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 loan. If someone co-signed any of these loans for you, they may be obligated to repay them in the event that you pass away early. Having life insurance can ensure that no one else becomes responsible for your debt. That includes consumer debt such as credit cards, personal loans or medical bills.
The cost of a modest funeral currently ranges between $8,000 and $10,000. It can be a huge burden during a difficult time – forcing your family to cover the expenses or turn to crowdfunding. Life insurance 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:
- Life insurance: With term life insurance, you are covered for a certain number of years, and you decide how long the “term” will be. If you live beyond that time frame, your coverage ends and no benefit is paid.
- All life insurance: Whole life insurance offers coverage for your entire lifetime. With this type of insurance, your family and beneficiaries are often protected throughout your life and the policy pays out 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, whole life insurance is a popular choice. With this type of policy, you can choose a term that covers you when you need it most – for example, the time it takes for your children to grow up. Term insurance also generally gives you the ability to purchase more coverage at a reasonable price. This limited visibility makes it a cost-effective option to protect the loved ones you leave behind.
For more information on the differences between these two types of life insurance, read our term vs. whole life insurance.
How much life insurance do I need?
Despite the compelling reasons to have life insurance, nearly 70 percent of single parents with children living at home are not covered by life insurance. Sometimes it’s simply because they’re not sure how much life insurance they need or how to make sure they choose the right policy.
If you have questions, we can always help you find affordable, quality insurance coverage that fits your life and budget. But generally speaking, your life insurance policy should match the financial obligations you 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 costs. And if you want to help your kids pay for college, include that amount as well.
Do you need help with calculations? Check out ERIE’s Life Insurance Calculator to estimate the coverage amount that is right for you.
How do I choose my life insurance term?
If you’ve decided to buy life insurance, you’re probably wondering “how long should my policy last”? The answer: It depends on your unique life situation. That’s why ERIE offers a range of life insurance options, including 5-, 10-, 15-, 20- and 30-year plans.
As a single parent, you should choose a period that lasts as long as your children will depend on you financially. Your insurance agent can advise you on specific policy 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?
Although buying life insurance may sound intimidating to some, life insurance is more affordable than you might think. For example, a healthy 35-year-old man might pay less than $18 a
month for a 20-year $250,000 life insurance policy from ERIE.4
And with ERIExpress Life, you can get the protection you need through a simple application process – without a physical medical exam5 and a faster approval time. Your life insurance coverage can take effect the same day you apply, and an Accelerated Death Benefit rider is automatically included.
Looking for more ways to save? ERIE also offers multi-insurance discounts depending on which country you insure your car and home with us.6 Just ask us how much you can save when you add life insurance.
Who should I name as my life insurance beneficiary?
A beneficiary is the person or entity designated to receive the money from your life insurance policy in the event of your death. It’s a big job, so it’s important to choose the right person – someone who is trustworthy and knows what matters most to you.
If you are purchasing life insurance to support your children, remember 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 your executor as the beneficiary and then include instructions on how to use the insurance money. However, when it comes to estate planning and wills and trusts, you should always consult a lawyer and/or tax professional. For more information, read our blog post on How to Choose a Life Insurance Beneficiary.
There is no better time
When it comes to life insurance, the only wrong decision is not to have 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 minutes. Ready for a quote? Contact us for guidance on creating the best life insurance policy to suit your needs.
ERIE® life products and services, provided by Erie Family Life Insurance Company, based in Erie, Pennsylvania, a member of the 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 conditions and restrictions may apply. See our disclaimer for further 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 office: 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 do business in all states. See the company’s licensing and business information.
The insurance products and rates, if applicable, described in this blog are effective as of July 2022 and are subject to change at any time.
Insurance products are subject to conditions and exclusions not described in this blog. The policy contains the specific details of coverage, 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 on applicable underwriting guidelines and rules in effect at that time.
Your ERIE agent can offer you practical guidance and answer any questions you may have before you buy.