How to Afford Life Insurance When You Are a Single Parent

It can be financially and emotionally draining to be your family’s sole supporter. Thinking about securing your children’s financial future may seem overwhelming, but it’s even more worrisome to think about what happens to your children when something happens to you. Many single parents overlook the importance of having life insurance, and believe that when they are short on money, insurance is just something they cannot afford. But the truth is they can’t afford to not have life insurance. If something were to happen to you, particularly without another parent in the picture, what would your child do? With life insurance you can be assured that your child’s day-to-day expenses, as well as other expenses such as college tuition, music and sports lessons can be covered; giving you one less thing to worry about. The question is how does a single parent like you go about affording life insurance?

Term Insurance

One option available to single parents is to opt for term insurance, which is the most affordable life insurance choice. Term insurance provides protection for a specific time period, and provides a benefit only if you become deceased within that period. It is often a good option for people on a tight budget due to its flexible level of coverage, allowing you to buy high levels of coverage when you need it the most. Term insurance is a great option for covering temporary needs; allowing you to get through your child’s college years with life insurance. If at the end of your term coverage you still have a need for life insurance, many policies will allow you to renew your policy.

Bundling Insurance

Another option is to bundle your life insurance with another type of policy. Many life insurance providers also provide health insurance, homeowner’s policy, car insurance, etc. Buying all your insurance from one carrier allows you to save a significant amount of money through discounts.

Check with Your Company

If you work for a company check to see if they include basic life insurance as part of their benefits package. Many companies allow you to purchase additional insurance through a low-cost group rate.

When you Absolutely Can No Longer Afford Insurance

If you are in a situation where you have life insurance but can no longer afford it there are several options to ensure that your family remains covered. Firstly, you have the option of cashing out your policy, which is only available to you if you have a whole life insurance policy (not a term policy). Although you will no longer have coverage, you will be able to obtain the cash savings that have accumulated over the time you’ve had your policy. By putting the money in an interest-bearing account you can get the best return available. Secondly, you have the option of converting your policy from a whole life insurance policy, which tends to be more expensive, to a term policy. By doing this you will gain all the benefits of a term policy, as well as obtaining some of the cash savings to pay for premiums. As a last resort you can let your life insurance policy lapse. Many insurance companies may allow you to reinstate your policy within five years. This is a good option if your financial burden is temporary.

The sooner that life insurance is purchased, the cheaper it will be because young age and good health allows insurance companies to offer you a lower rate. No one wants to dwell on death, however preparation in case the worst happens is crucial. Making sure your children are well cared for, especially when you’re their sole provider will give you peace of mind.

 

 

 

 

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