Why Single Parents Should Consider Owning Life Insurance
Parenting is one of life’s most challenging jobs. In addition to planning for their child’s day-to-day needs, parents are also responsible for looking forward to and preparing for their child’s future. With the growing number of children living in single-parent families in the US, this article will look at the cost and importance of owning life insurance for single parents.
What does life insurance cost? What can I afford?
Understanding how much you can afford is the first step in finding the best policy for you. You want to ensure that your policy fits within the scope of your other financial planning tools such as Disability Income Protection and Malpractice insurance. The good news is that some term life insurance premiums allow for the option to convert to permanent coverage, so it’s wise to shop around for the best value and something that makes the most sense for your financial needs. Take time to get educated on your options and understand what your coverage will include.
How much life insurance do I need, and what expenses does my policy need to cover?
When it comes to insurance, people typically think of funeral expenses and medical bills first. However, if you are parenting solo, there are many other expenses that you can consider. For example, college tuition fees, paying off remaining debt balances, or ensuring specialized income for children with special needs can be covered by life insurance. If you are a solo practitioner, it will definitely be worth your time to create a plan in the event you should pass and the implications that will have on your children in regards to inheriting your business.
While insurance professionals typically recommend an insurance policy worth 5 to 10 times one’s annual income, this target is not always applicable in circumstances like single-parent households, especially for physicians and physician business owners. Talking to a qualified Financial Professional will help you determine the best coverage for your situation.
How long will you need your coverage? Term vs. whole life insurance?
Term life insurance policies are limited to a set number of years, typically between one to two decades of insurance coverage. These policies may be more competitively priced than whole life insurance policies and could cover the income lost if the policyholder passes away. A whole life insurance policy accrues a cash value that the policyholder can use while still living. These funds can be borrowed against other important expenses like a home purchase, college tuition and can even be used in place of funds for retirement.
What if you outlive your policy?
As a single parent, you hope that your children will never need to rely on a life insurance policy that you’ve left for them. So what happens if you outlive your policy? Some providers offer a Return of Premium policy that returns the premiums paid if the policy goes unused. However, you can expect to pay as much as 30% more per month for a refundable policy. If you are a young single parent in good health, you’ll need to decide whether this extra cost is worthwhile for you.
Life insurance is one of the best options that single parents have for protecting their family’s future needs. The best place to start when planning to purchase a life insurance policy is to talk to a trusted financial professional who can help you determine which policy works best in your situation. And for physicians and medical practice owners, it pays to consult with a team who specializes in working with other medical professionals. They will know all the complexities of running your practice, and the financial protections and strategies required to keep you on a path of success. With competitively priced and flexible options available for your family, there is no reason not to enjoy the benefits life insurance has to offer.
For information, contact Glenn at WealthScope Financial for your no-cost consultation.https://www.wealthscopefinancial.com/contact
This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. Always consult your legal or tax professionals for specific information regarding your individual situation.
©2022 The Penn Mutual Life Insurance Company, Philadelphia, PA 19172 www.pennmutual.com. Content prepared by Penn Mutual.
Ready to Claim Your Credits?
You have attempts to pass this post-test. Take your time and review carefully before submitting.
Good luck!
Recommended
- Practice Management
Technology Solutions: Q&A With Nextech's Dr. Jason Handza
Jason Handza, DO
- Practice Management
Panic-induced Digital Marketing: Avoid Short-sighted Shifts in Long-term Strategy
Naren Arulrajah
- Practice Management
Virtual Events: Put Your Practice’s Best Face Forward
Naren Arulrajah
Andrew Mastro, MS, PA-C