Parents have many responsibilities and being a multitasker and a planner is a huge part of it, especially when it comes to finances. Looking back, I’m constantly amazed at how well my mom handled raising us. Being a single parent often means having to be more aware of one’s finances, including how to prepare should something unexpected happens.
Losing a parent is devastating already, but losing one’s only parent can be extremely tumultuous. Preparing now can help alleviate some of the pain and help the family rebuild itself.
Planning for the Unexpected
First off, choosing guardians/ a guardian for your child(Ren) should be your focus. When we were deciding whom to ask to be guardians for our baby we created a list based on what was important to us. They included:
- Religious/moral beliefs – Would you like to have your values passed down? To us this was extremely important. Our child will have to make her own decision as to who she wants to be; we just want her to have a solid foundation and be raised with love.
- Child-rearing philosophy– Does the guardian have similar ideas when it comes to raising kids?
- Personality – Is your child familiar with them and get along with them? Will there be constant clashes or will they be able to work it out?
- Location – Will your child have to move?
- Health – Will the guardian(s) be physically able to handle the responsibilities? Are they in reasonably good health now?
Getting Life Insurance
Another area to be extra concerned with planning is life insurance. Getting the right insurance coverage can give some peace of mind. Besides handling the day to day with us, my mom also focused on planning for the long term and for unexpected events. She signed up for an insurance policy to protect us in case she passed away. We’re extremely grateful it hasn’t been needed, but we also appreciate that she took the time to get a policy as a safety net.
Factors to Consider When Calculating Life Insurance Coverage
When calculating what amount is right for you, it takes some time to mull over the details. There is no one rule that fits all families with life insurance.
- Budget: It does no good for a single parent to get an insurance policy if the premiums are a strain on the budget. If you have a limited budget, then get a smaller policy that you can consistently pay on.
- Final Expenses: As uncomfortable as it is, thinking ahead about your final wishes now will make it easier on your loved ones.
- Helping out guardians: If you want to leave something for guardians to assist them with raising your child(Ren) run the numbers to find something you’re comfortable with.
- A gift for your child(ren): Some parents would like to leave a financial gift for their kids when they become an adult.
Don’t feel bad if your current budget allows you to meet all of your goals. You can also get another life insurance policy later as your income increases. Just do what you can for now and build from there.
For us, we have gotten term life insurance policies. It allows us to get more coverage for a smaller premium that we would get with whole life insurance.
Thoughts on Life Insurance for Single Parents
For single parents who’ve already purchased their policies, what was the process like for you? How did you decide how much was right for you and your family?
Disclosure: Posts includes information sourced from Genworth Financial