The Importance Of Life Insurance For Moms

January 27, 2020

As a mom, it is only natural to worry about what the future may hold for you and your family. 

The thought of your children losing their mom is an unbearable one and one that most of us do not want to think about. 

It is important to have a plan for if the worst were to happen to ensure the future of your family. As a single mom, it is even more important to make sure your children will be protected in a worst-case scenario.

 Life insurance helps you to protect your children when you’re no longer around to do so. 

While there is not much that can help to fill the emotional void of losing a parent, your pay out will be able to relieve any financial stress that comes along with it. What is shocking is that 61% of moms do not have life insurance. 

Award-winning UK life insurance broker, Reassured, are here to discuss the importance of life insurance for moms.

Types Of Life Insurance For Moms

There are many different life insurance options available and you can take out any cover that you see best to take care of your loved ones. However, moms most commonly take out the following types of cover:

Level Term Life Insurance

With level term life insurance, your pay out remains the same throughout the lifetime of your policy. This means that no matter when you pass away, your loved ones will receive the same amount that was agreed when you took your policy out.

Your cover will protect you for a set amount of time (the term), this can be up to 40 years. If you do not pass away before the end of your policy, it simply expires and no pay out is made.

Your lump sum pay out can be used for covering living expenses, funeral costs or leaving as inheritance for your beneficiaries.

Decreasing Term Life Insurance

Like with level term cover, your policy will cover you for a set amount of time (up to 40 years). However, the amount paid out will reduce over the course of your policy. 

This is a good type of cover for repaying debt that decreases over time, such as a mortgage.

If you do not pass away during the term, no pay out is made and your policy expires.

Family Income Benefit (FIB)

Again, with a family income benefit (also known as family income protection) you will pay a monthly premium that will cover you for a specific amount of time.

The difference is that instead of receiving a lump sum pay out upon passing away, your beneficiaries will receive a monthly (tax-free) income. These payments will run from the date of death until the end of the policy (arranged by the policy holder).

These monthly payments can be used to cover the day-to-day living expenses of your family.

How Much Cover Should A Mom Take Out?

The amount of cover that you need to take out will depend on your own personal circumstances and will all come down to what you want to protect.

You can take out more than one type of cover if you believe this to be the best for your family.

For example, you could take out decreasing term cover to help pay off your mortgage and also a family income benefit to give your family monthly payments to cover the cost of their living.

And How Long For?

This can usually be worked out by two factors.  

  1. How long you have left to pay off your mortgage
  2. The age of your children 

 If you are taking out cover to pay off your mortgage, the time period of your policy will need to mirror the length of your mortgage repayments.

If you are taking out cover to secure the financial stability of your children, you will need the time period to match up with when they will be financially stable and able to take care of themselves.

To put this into perspective the cost of raising a child in the UK, over 21 years, is £231,713. If you have very young children, it may be an idea to choose a figure close to this as your sum assured (the amount that will be paid out upon your death).

If you think your children are likely to go to university you will also need to consider this as it will increase the time it will take for them to become financially independent.

Why Is Life Insurance Important For Moms?

Whether you are a working mom or a stay at home mom, life insurance is an essential.

If you are a working mom you will need protection in place to cover the loss of your income, to ensure that your family can continue to live a comfortable life.

If you are a stay at home mom you will need cover to take care of any extra childcare expenses that will arise as a result of you passing away.

Without a pay out your family could end up in financial difficulty, struggling to cover day to day living costs and bills (let alone the cost of your funeral).

Life insurance provides security that your family’s lifestyle will be able to be maintained after your passing. You can ensure that they can stay in the family home and they will not struggle financially.

Life Insurance For Single Moms

Life insurance for single moms is even more important, not only will your child be losing a parent, but also the sole breadwinner of the family. This means that your child will be left with minimal or no financial support.

Only 42% of single parents have a life insurance policy in place to protect their children, this is because most single mothers are getting by on a single salary and think they cannot afford to take out life insurance.

But life insurance does not have to be expensive and you can secure a cost-effective price by shopping around to find the best deal. You can do this quickly and easily by using a life insurance broker, such as Reassured.

Reassured have helped to secure the lives of over 400,00 families, they are also FCA regulated and their broker service is complete free to use.

As you can see from this post life insurance is an incredibly worthwhile investment, not just for yourself, but for your family and their future. Hopefully, this post has given you some ideas about what cover is the best choice for you and your family.  

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Andi Perullo de Ledesma

I am Andi Perullo de Ledesma, a Chinese Medicine Doctor and Travel Photojournalist in Charlotte, NC. I am also wife to Lucas and mother to Joaquín. Follow us as we explore life and the world one beautiful adventure at a time.

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