6 Reasons Every Parent Should Have Life Insurance
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The motto “always be prepared” isn't just for Boy Scouts. Preparing for death is a responsible way to make sure your spouse and children are taken care of once you've passed away. It's not a topic that anyone likes to talk about, but here are six reasons why every parent should have life insurance.
1. Debt & the cost of raising children.
Another thing parents should think about is the amount of debt and financial obligations they'll be leaving behind when they pass away. Major expenses include mortgage payments, car payments, monthly utilities, and credit card debt.
For parents, the day-to-day costs of raising of children – providing them with food, clothing, and other necessities – should also be considered. Perhaps you also have school tuition costs to pay. Other expenses such as extracurricular activities should also be taken into consideration. And of course, those figures should be multiplied by the number of children you have.
Needless to say, those costs can be a significant burden for the surviving parent, particularly if the main breadwinner is the person who passes away. A life insurance policy can help ease that burden, providing your family with financial security. If you're in need of one, Policygenius is a great place to start, allowing you to compare rates from various providers.
2. Covering the value of the stay-at-home parent.
It's a common misconception that a stay-at-home parent doesn't need life insurance. That couldn't be further from the truth. Imagine if the sole earner of the family passes away. The surviving stay-at-home parent will likely find themselves in need of a job. And at that point, they'll probably be forced to pay someone else for childcare and other duties.
A newly released survey found that being a stay-at-home parent was equivalent to having 2.5 full-time jobs. Combine that with a 2016 study which found that a stay-at-home parent's annual worth was around $143,102 and you'll quickly see why a life insurance policy is a good idea for both parents – not just the one who goes to an office every day.
3. College costs.
The annual cost of a four-year education at an in-state public college is $9,970, according to CollegeBoard data. And that's just for one year. A four-year education would set you back $39,880 if your child was going to college today and rising costs weren't practically guaranteed. That's also before you factor in books, room, board, and miscellaneous costs (and before you multiply those costs by each child).
Life insurance is a great way to make sure your children receive a quality education and won't graduate with tons of student loan debt.
4. Immediate expenses.
The very first immediate expense to take place after a person's death is the cost of the funeral. Those who have a life insurance policy can rest assured that their family will be taken care of, while those without a policy will be leaving their loved ones to foot the bill. This can add unnecessary stress during an already tragic time, and can leave your family members in debt.
The average cost of a funeral in the United States is currently hovering between $8,000 and $10,000, according to funeral home comparison website Parting. With a number like that, it's easy to see why some people are left with a huge financial burden when a loved one passes away.
5. It supplements your workplace policy.
If you have life insurance through your employer, that's great. However, it's probably not enough. The payout on group life insurance is generally lower than if you take out an individual policy. In fact, it's typically only 2.6 times your annual income, according to a 2016 study by the Life Insurance and Market Research Association (LIMRA). The industry recommendation is to have a policy that is more than double that amount, and some experts recommend having even more. Another thing to consider is that a work policy will be canceled once you leave your current employer, whereas a whole life individual policy will stay with you forever.
6. It's not expensive.
Most people tend to think that life insurance policies cost a lot of money, and that misconception often stops them from getting one. However, a healthy 30-year-old male pays an average of just $21 a month for a 20-year policy. You probably spend more than that on lattes. Buying a policy at a young age and when you're healthy can also save you tons of money in the long run, so there's no reason to put it off.
The perfect policy for you will vary based on a number of factors, from your personal health to the number of dependents you have. Luckily, technology has made comparing policies easier than ever before, with sites like Policygenius laying out all of your options in a matter of minutes.
Preparing for death can mean peace of mind for you, and security for your family. There's no time like the present to begin ensuring that your loved ones are taken care of once you're gone.