Life Insurance For Single Moms

Life Insurance For Single Moms

Life insurance is a must-have financial protection for every parent. In the event of the death of one parent in a married household the surviving spouse might be able to provide some source of income to keep up with the household expenses however single moms and dads may not have alternative sources of financial support for their kids if they pass away unexpectedly.

A life insurance policy creates a safety net for your children’s day-to-day expenses, care, and continuing education. As a parent, you need to make sure your children get all the support they require by getting the right amount of life insurance and also choose your beneficiaries of the policy carefully.

Does A Single Mom Need Life Insurance?

Single moms need life insurance because without insurance it is likely that the earnings that your minor would rely on will not be replaced in the event of the death. Having life insurance in place irrespective of whether it is a small or big one is better than nothing at all as it can protect your family’s financial future.

Single moms who are raising their children on their own should have a life insurance policy. Unfortunately, around 70% of single moms in the United States lack life insurance. While planning for insurance you can work with a financial advisor who can help you know the different types of insurance and how much coverage you can get from your policy.

How Much Life Insurance Should A Single Mom Have?

Life insurance for single moms provides an additional source of income and support to their family in case of their death. The general rule of thumb says that life insurance should cover a minimum of 50% of your household’s annual income. While some may advise you to have life insurance that can cover a minimum of 7 to 8 years of your salary, as a single mom, you may need more coverage than this. The right amount of life insurance coverage that you need depends on several factors such as the following:

1. Income

A lot of experts suggest having a death benefit of a minimum of 10 to 15 times your annual income which will cover the day-to-day expenses of your beneficiaries like groceries, education, and bills.

2. Outstanding Debt

Although your children will not be responsible for paying for your debt on your behalf, your cosigners may have to pay you for your outstanding debt and creditors might seize the property for the loans or debt your parents signed. Single moms should have a life insurance policy that can pay off their longest debt.

3. Future Expenses

Single moms who are planning to send their children to private school, establish a savings or college fund for them, and pay for their extracurricular activities should keep future expenses in mind before planning for a life insurance policy.

Adding these vital factors will help you to get a sense of how much life insurance coverage you need to purchase. In a nutshell, a single mom should have enough life insurance that can replace their earnings and provide additional protection against inflation.

Experts recommend purchasing life insurance coverage which is 10 times your annual income. The exact amount of life insurance coverage that you need will depend on your income, the amount of debt you have, and your household expenses. To get a better idea you must use life insurance calculators online that can help you to know the coverage you need based on your life circumstances.

Best Life Insurance For Single Mom

Following is the list of the best life insurance for single moms and dads and why they might be the right option for you.

1. Term Life Insurance For Single Moms

One of the most affordable life insurance for single moms that can protect their family’s financial future and provide them security is the term life insurance. Term life insurance policies provide protection or safety for a particular period so the premiums are comparatively lower than whole-life premiums.

The term policies are also more flexible unlike other life insurance since you can choose the adequate coverage amount as well as the term length as per your needs and preference. Term life insurance is adequate to lower your debts, mortgages, and your family’s present as well as future expenditures.

2. Whole Life Insurance

A permanent type of life insurance and alternative to term life insurance is whole life insurance coverage. It comes with a savings feature and provides lifelong coverage to your beneficiaries. This insurance is 5 to 15 times costlier than term life insurance. The additional features that come along with this insurance may not be worth the cost. It is designed for those who are looking to use their policy to attain long-term financial obligations and fulfill coverage needs like providing lifelong care to their dependents or diversifying their investment portfolio.

3. Group Life Insurance For Single Moms

Working single moms may have access to group life insurance through their employer. These life insurance policies are easy to qualify and are heavily subsidized or free but rarely provide coverage. The death benefit payout amounts that come along with this insurance policy are also low. Single mom drivers who fail to qualify for personal term life insurance policies can go for employer-provided life insurance or group policy.

It can be an excellent option for single moms and dads if they are unable to afford a robust insurance policy due to financial limitations. The drawback of opting for group life insurance is that it generally comes with a low coverage amount of one or two times your annual salary and is likely not adequate to pay off your debts or remaining mortgage. The insurance coverage of this plan ends when the person leaves their job.

4. Critical Illness Insurance For Single Moms

The medical illness insurance policy is helpful for single moms and dads as they receive a one-time lump sum of money if they’re diagnosed with a critical illness or disease. Even though it is not a replacement for life insurance, it will also provide support to your family in the event of your debt. The effects of this insurance policy are that it helps to pay for your expenses related to a medical diagnosis and other living expenses while you are recovering.

Critical illness insurance covers specific health and illness conditions depending on your insurance and it’s helpful if your insurance does not have this coverage. Single moms cannot purchase critical illness insurance for any pre-existing illness or condition. The amount of coverage may vary depending on the severity of illness or condition for instance if you’re diagnosed with cancer which is treatable and results in minimum downtime you might not be eligible for a claim.

Who Should Single Moms Name As The Beneficiary Of Their Insurance Policy?

Single moms and dads instinctively name their minors as the beneficiary of their life insurance policy. However, it may not be a good idea. Children cannot legally accept life insurance money and this results in the death benefit payout of the policy, getting stalled in court or legal proceedings for several months.

Rather than naming your child as a beneficiary of your policy you can set up a trust and name it as your beneficiary. Single moms can specify how the amount will be distributed, the amount of money that has to be spent and what are the areas where it can be spent on.

The trustee will help to carry out your wishes in the event of your death. A financial advisor will also help you to make a good comprehensive plan to secure your child’s future. Life insurance companies will not pay out claims to minor children therefore you need to make arrangements to secure your child’s future in the event of your death. It is important to update all the personal information in your insurance policy. For instance, changing the beneficiary and removing your ex-spouse from the policy if you do not want them to receive any death benefits.

What Are The Common Mistakes That Single Moms Should Avoid While Meeting Life Insurance?

A lot of single moms and dads with dependent children may have life insurance but they may not provide the right coverage for the common mistakes which you should avoid while making life insurance.

1. Naming A Dependent As Beneficiary Without Making A Trustee

A lot of single moms name the minor beneficiary of their life insurance policy without appointing a trusty. Unless you’re going to appoint a trustee your beneficiaries will not receive any death benefit from the program. For instance, if your children are under 18 years you have to name a trustee who will be responsible for the life insurance payout unless your kids are old enough. A trustee should be someone whom you can trust and who can help your family in difficult times.

2. Buying Permanent Life Insurance

Purchasing whole life insurance is expensive unlike term life insurance, and is generally 5 to 10 times more costlier. Single moms without dependence or much debt in the future need not purchase permanent life insurance and pay the premiums for the rest of their lives. This is a product that is considered to be a high net-worth individuals

3. Purchasing Life Insurance For Your Children

Life insurance for your kids is unnecessary if you’re a single mom. Purchasing life insurance for your children makes you log into a permanent plan with a huge monthly premium. This also makes you unlikely to get a claim against it in the future. You might think that life insurance for your children is a way to put aside some money for the protection of your children, however, opening a savings account would be a better option to secure the financial future of your children or to make preparations for unexpected funeral costs.

4. Relying On Mortgage Life Insurance Only

Mortgage life insurance will not provide any death benefits to your minors in the event of your death and can only safeguard you against creditors. The mortgage life insurance pays off the rest balance of the mortgage in case the mortgage holder passes away. Mortgage life insurance is more expensive, unlike term life insurance. Also when you change a mortgage provider the policy will not automatically move with you. Single moms going for mortgage life insurance will increase their expenditures since mortgage life insurance providers provide the same rate to everyone irrespective of their health or other conditions.

5. Relying On Group Life Insurance

It isn’t a good idea for single moms to rely on group life insurance as it is insufficient for them and will not provide the right coverage. You can go for group life insurance to get complimentary benefits in addition to a robust term life insurance policy. A lot of single moms make the common mistake of relying on group life insurance which only covers one or two times their annual salary and will also not provide any income protection for families to meet their ongoing expenses.


Life insurance protects your kids in case of your death. Term life insurance offers coverage as long as you need it and until your kids are financially independent enough to support themselves. The premiums that you have to pay on this type of policy remain the same throughout the life of the policy therefore it is less complicated for single moms. Term life insurance is one of the most flexible and affordable options for single moms that can help them secure their family’s future. The older you are the higher your life insurance premium rates therefore it is the best time to purchase life insurance now and secure your dependence on the future.

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