Congratulations on being here. This means you truly care as a parent. It also means that you’re incredibly strong… so take a second to pat yourself on the back. Ok- that’s enough! You’re here because protecting your child or children is important, as it should be. Here we’ll cover the best insurance for a single mom: 2 types of insurance that are most popular in this common situation, and you can decide which is best for you.
Most Common Types of Insurance for Single Moms
Term Life Insurance
You can learn more about Term Life Insurance here, but for the sake of this post, Term Insurance might be taken out in any of these scenarios:
- I want to make sure my home will be paid off if something should happen to me, so that my kids can continue living here
- I want to ensure that my children will have the costs of college taken care of, should something happen to me
- I want to be sure that my outstanding debt will be paid off if something should happen to me
In other words, term insurance in most cases is taken out for a certain duration, and for a certain dollar amount. This means you may take out a policy that lasts for 20 years and pays out $250,000. The $250,000 is paid out only if the insured dies during that 20 years. If not, the upside is that the insured is still alive. Your monthly, quarterly, bi-annual or annual payments are based on your health and other factors at the time that you open the policy. That’s why the earlier you take out a policy, the higher your savings may be.
You can learn more about Disability Insurance here, but for the sake of this post, Disability Insurance might be taken out in the following scenario:
- I want to make sure that the income I rely on to pay bills, mortgage, put food on the table and provide for my family, will be replaced in the event that I am injured or unable to work
In other words, disability insurance in most cases is taken out up to a certain age, and for a certain monthly payout. This means you may take out a policy that lasts to age 60 and pays out $5,000/mo while you are disabled. The $5,000 is paid out only if the insured is disabled. If not, the upside is that the insured remains in full health and working condition during their whole career- which is not as common as you may think! Your monthly, quarterly, bi-annual or annual payments are based on your health and other factors at the time that you open the policy. That’s why the earlier you take out a policy, the higher your savings may be. In addition, most of the time you are able to modify your policy so that if you start making more money throughout your career, your policy will reflect the higher income that you depend on so that you are adequately covered in the event you become disabled.
Things to consider…
– ‘Return of Premium’ Term Insurance is an option if you want to get your payments back after the term duration is surpassed (although it is more costly up front)
– Disability Insurance may only pay out upon the insured becoming ‘Fully Disabled’ – which can come with a strict criteria
Only you, your family and your insurance professional can decide which type of insurance is best for you. This article is meant to give you the rough details of Term & Disability Insurance, so if you want to know more or get your questions answered, get in contact with us today!