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Life Insurance For Single Mums

Life Insurance

It’s the natural instinct of any mother to project their children. While you can’t do that physically after you’ve gone, you can do it financially in the form of life insurance. It can also give financial help to the guardian of your children.

There are numerous ways that life insurance can be a huge help for single mums. While that is true, there are many questions that you may have. Who will receive the money? Do I need insurance? What type should I get? These are the types of questions we aim to answer here.

Should you get single parent life insurance?

Everyone’s situation is going to be different and not everyone is going to need life insurance. If you share custody of your child with the father who is in a comfortable financial situation then you may feel it’s not required.

For many single mums, they don’t have that luxury and know that if they are to pass away, the guardian of their child would struggle financially. There are many child-related costs that people have to cope with such as childcare along with all the smaller items that add up such as nappies, schooling, food and other day-to-day costs.

When you add all of this on top of regular bills, it can be hard to cope. If your child will be cared for by another person then you have to think about their financial situation. Life insurance can be a great way to give you peace of mind that they’ll be okay.

Putting life insurance in a trust

If ongoing finances aren’t a concern then there is another great reason to get life insurance and that is to leave something behind for your children. You can write your life insurance into a trust which can payout on your death or on a date of your choice. One of the most common terms of a trust is for it to pay out on your child's 18th birthday.

You are able to stipulate the terms of the trust, who manages it and what powers they have over it. You have the flexibility over who the trust will be operated but it's important to seek legal advice to ensure there are no complications after you pass away. An example of an error to avoid would be creating a trust for one child and not amending the terms if you had a second.

The benefits of a trust are clear. It will give your children financial security in their adult life and leave them with a pot of money that they can use to fund their education, use as a deposit on a home or for anything they wish.

Types of single mum life insurance

Many people assume that life insurance is simply a large payout once you've passed away but it can be more nuanced than that. Here we look at the varying types.

Full life cover – This is your commonly known type of cover where you pay a higher monthly premium and then receive a lump sum payment. While these are great for those looking for a high cash payout, the monthly costs can be quite high.

Term insurance – In this policy, your insurance is attached to something specific which is usually a mortgage. If you pass away, then the remaining mortgage would be cleared. As your mortgage balance would reduce over time, so does your payment. This makes it a much cheaper form of cover.

Choosing the right life insurance for single mums

You shouldn't dive headfirst into the world of life insurance without a plan. You want to know exactly what it is you want cover for. Do you want to leave money in trust? Perhaps you want to be able to clear the mortgage and make life easier for your child's guardian?

To work out the right cover, you need to assess your situation. Look at who is going to look after your children when you are gone and if they'd need financial help. If that situation is going to be comfortable then you may be more included to opt for a trust.

Flexible life insurance for single mums

Your life insurance policy doesn’t have to be set in stone once you sign into an agreement. While some policies can’t be changed, others can be amended as your circumstances change. This allows you to adjust your policy as and when you need to.

It could be that you have more kids in the future, get married or perhaps take on a mortgage. There are times when your financial priorities change. Some people think that means getting out a new policy and there are some people out there you have several policies, which are hard to manage.

Does single parent life insurance make sense?

As you've seen here, there are misconceptions about life insurance but there is a plan out there that works for everyone. Your priority is always to protect your children and whatever your circumstances, you can do that with the right life insurance policy.

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