5 Reasons Why Life Insurance Is Essential for Single Mothers

why life insurance

What happens to your kids if something happens to you?

As a single parent, this thought can be terrifying. No one wants to think about dying. But when little ones depend on you, you can’t help but wonder what would happen if you were no longer there.

That’s why life insurance is important. When you’re the sole provider for your kids it’s even more important.

With the right life insurance policy, you can provide for your kids even when you’re not around. That would assuage a lot of worries, wouldn’t it?

Money is always pretty tight, though. Every cent counts. You may be wondering if you can really afford to buy life insurance.

Let’s take a look at some options. And then we’ll look at some reasons why you can’t afford not to buy life insurance.

Term Vs Whole Life Insurance

When you’re pinching pennies to provide basic needs for your children, every cent counts. You know that life insurance is important but you don’t know if you can afford it.

There are two general types of life insurance policies. Term life insurance and whole life insurance. The main difference is that term life insurance is good for a set term. Terms typically run from 10-35 years. Whole life insurance covers you your entire life.

Thus, a term life insurance policy is a lot cheaper. There is less risk that you’ll die during the term so the company can afford to offer a plan at a cheaper rate.

Term life insurance policies are very affordable. The peace of mind alone that a life insurance policy will give you is worth far more than the premium.

You can find more information about term vs whole life insurance and get a quote here.

Why Life Insurance?

Okay, so life insurance is affordable and gives you peace of mind. But what does that really mean? What do life insurance benefits cover and how will it put your mind at ease?

Let’s look at some of the reasons why life insurance is important for single moms. You can pick and choose what you want your specific policy to cover but here are some common options.

1. Death Expenses

It may surprise you to know but dying is very expensive. The average cost for all end-of-life necessities (not just the funeral) is a whopping $11,618!

You barely have two pennies to rub together on any given day so it can’t come out of your savings. Who’s going to pay for your death expenses?

With a life insurance policy, you don’t have to worry about that question. The policy will cover your death expenses.

This makes things a lot easier on family members. They have enough to worry about during such a difficult time.

2. Pays Off Debts

Are you still working diligently to pay off your debts? What happens when you die? Do they just go away? In some cases, they do. In others, they don’t.

For example, say you are paying off a mortgage. If you die, the house would most likely have to be sold to pay back the debt. Thus, in addition to losing you, your kids would have to leave their home.

A life insurance policy can pay off your mortgage. Your kids’ new caregiver could come to live with them instead of having to be uprooted during such a tumultuous time.

3. Covers Estate Taxes

The government is only too happy to have a tax for everything and that includes your estate. Of course, as a single mom, you might not have much of one. But what you do have you want your kids to be able to keep.

Estate taxes vary depending on the state you live in. Plus, if the estate is worth less than a certain amount (that varies by state) they won’t be levied against your estate.

But, if estate taxes do come into play, your kids won’t have to worry about them if you have a life insurance policy that covers them.

4. Covers Your Kids’ Expenses

Your mom, sister, cousin etc may be totally willing to look after your kids if something should happen to you. But, as you know, kids cost money.

Can your mom support your kids on her fixed income? Probably not. Your sister or cousin may already be stretched thin caring for her own kids.

A life insurance policy will ensure that the money needed to take care of your kids is there.

Life insurance policies don’t typically pay out to your children. That makes sense as they wouldn’t know what to do with the money anyways. Instead, you can name a guardian or create a trust that will pay out the money at specific intervals that you can choose.

Regardless of how you want to set it up, you can rest easy knowing that the necessary money will be there.

5. College Expenses

You can even include college expenses in your life insurance policy. Your premium may be higher with this option included. But if a college education is something that you really want for your kids, it may be worth it to you to include it.

Final Thoughts

It’s not a pleasant thought, but one day you’re going to die. You hope it’s when you’re old and your kids are already raising kids of their own.

But you don’t get to choose. You can eat healthily and exercise all you want, but you don’t get to choose when you die.

Take away the fear that your kids won’t have what they need by buying a life insurance policy. You can hope your kids will never need it, but it will be there just in case. That’s why life insurance is so valuable.

For more great personal finance and budgeting tips be sure to check out our blog.

Anything to Add? Leave a Comment!

Follow Us On: Thrifty Momma Ramblings Facebook for more great tips for thrifty living!