Why Every Parent Needs Life Insurance

Posted on: 25 July 2017

As a parent, you want to make sure that your spouse and children will be taken care of in the event of your death. A life insurance policy is a simple, affordable way to make sure your loved ones are financially secure after you are gone. Read on to learn why every parent needs life insurance.

You Can Choose Your Child's Guardian Based on Who You Feel Can Best Care for Your Child

Should you and your spouse both pass away, someone else will have to take over caring for your children. Every parent knows that choosing a guardian for your child is one of the most difficult decisions that you have to make. While you want to choose the individual that you feel will be the best fit for your child, you also want to make sure that your children are raised in a secure environment. You want to make sure your child's emotional needs are met, but you also want to make sure that the guardian will not struggle financially by taking in your child.

With life insurance, you know that the financial resources are available to help whoever you desire have the funds to care for your child. Many parents choose to purchase life insurance that is sufficient for the guardian to purchase a larger home or pay for private education.

To ensure the funds are not mismanaged, you can put your life insurance policy inside of a trust. When you die, the funds are disbursed according to your wishes. You can also designate a trustee to oversee withdrawals from the account.

The Loss of a Spouse Can Be Financially Devastating for a Household

If you or your spouse were to pass away, this can leave your household in a financially vulnerable position. Since losing a spouse or parent is such a traumatic event, life insurance ensures that you do not have to worry about the financial implications of your death. Though the exact figure varies based on your personal financial situation, ideally you want to the life insurance policy to cover your income until your children are grown.

Some spouses like to include college costs and debts when determining how much life insurance they need. Don't be fooled into thinking that the stay-at-home parent does not need life insurance. Consider how many activities the stay-at-home parent accomplishes each day; if this parent dies, the surviving parent will have to take on these tasks in addition to raising the children. For convenience, the surviving spouse may prefer to outside these duties. Adequate life insurance makes this a possibility.