What Is The Best Type Of Life Insurance For A Single Mom, Trying To Plan For The Future Care Of A Young Child?
Posted June 26, 2009 – 10:57 am in: structured settlements FAQI am a 21 year old mother of one (2 year old) and am seeking life insurance, to reassure myself that my son will be taken care of should anything happen to me.
Tags: Best, Care, Future, Insurance, Life, Plan, Single, Trying, Type, What
9 Comments
Life insurance won’t take care of a kid. A caring adult will. What would a 2 year old do with $100,000?
You want to consider 20 or 30 year level term life insurance. With a level term life insurance policy the rates will remain the same each year for the entire term of the policy.
Determine how many years you want the protection for your son. But, most important, buy a policy you can afford.
Term insurance offers you the maximum amount of protection for your son at the lowest rates available, considering your age, needs and goals.
Make sure to look at the rating of the life insurance company you choose. Get a policy with an “A” rated insurer. If you can afford it, pay an annual premium, it is usually a little cheaper than monthly premiums.
Make sure you are comparing apples to apples (same type of policy) when you compare your quotes.
To learn more about term life insurance go here: http://www.term-life-online.com/term-lif…
I would recommend you talk to a reputable insurance agent.
More importantly, I would suggest you make a will to spell out specifically who you want to raise your child should something happen to you. In your will you can specify who gets the money for his care and also leave an amount for him to receive when he turns 18.
Without a will, your son’s future is decided by a judge who knows neither he or you.
THE BLACK MARKET.
Insurance is there to provide for a dependent’s needs in the event that one is unable to do so.
There are two types of needs: permanent and temporary. And, there are life insurance products to cover those needs respectively. For permanent needs such as food, clothing, shelter, there are products that are usually called universal or whole life. For temporary needs, such as college, there is temporary insurance, called term insurance.
In the case of your child, you may want to view most of your need to care for him as temporary. Assuming he is healthy, you likely envision that he will some day be a self-sufficient man. Toward this end, you may want to provide for an education and basic living expenses for him as a minor, for the next 21 years or so. Consult a financial advisor or financial planner (NOT a life insurance agent!!) to give you an idea of how much this is likely to be, considering things such as inflation and the costs of education. Then, consider buying a 20-year term policy to cover this need. (This is where the life insurance agent should come in. If you start out by calling a life insurance agent, he/she will likely sell you as much of the most expensive or highest commission paying product that he/she can convince you to buy.) With respect to permanent needs, you may want to provide a certain level of financial stability for your son, whether you should die at 25 or 85. This amount, is like a permanent gift toward his stability. Decide what that should be, perhaps with the assistance of a financial advisor or planner, but that’s not so necessary as in the other case with term, and purchase a universal or whole life plan for that amount. I suggest a universal plan. This sort of product will be able to serve many purposes in your life. Any good advisor should be able to explain this to you.
If the agent that you contact does not have the ability to advise you with respect to universal plans, GET ANOTHER AGENT. The reason is because this reflects the general level of industry qualification of the agent. Someone who is qualified only on a certain level is not going to be able to give you the most comprehensive service. And, he/she is likely to try to convince you to buy whatever it is he or she is licensed to sell, as opposed to what you need. All agents work on commission from the agency, so you are not paying for this service. Therefore, use only the best. I suggest that you try a broker from a major investment company. Just call them up. They will be able to offer you a variety of insurance companies and all the options that are out there. And, you will likely get top-notch service and someone who will gladly offer you financial planning for free.
Good luck and I applaud your efforts toward providing for your family.
probably term life insurance. there is some protection from social security if you die. make sure you have paperwork specifying WHO will take care of him and WHO will administer the money from the life insurance. YOu only need it for about 20 years, after that he is on his own. that’s why i recommend term insurance.
check out Modern Woodman of America, its great for you and you get life insurance for your son. Say your son gets really sick (heavan forbid) they cannot not pay for any reason. Its the insurance I have, and my 8month old daughter, she will keep it for the rest of her life and she can increase the amount when she becomes 18. Its great insurance and affordable, i pay $60 a month for two people. go to http://www.modern-woodmen.org/
any insurance
But a TERM LIFE policy.
Do NOT buy anything else! Everything else is a variant of “whole life”……it goes by tons of different names…..universal life, on and on. Do NOT let the agent try to insure your kid. Your kid generates no income. The purpose of life insurance should ONLY be to protect the loss of income.
Stick to your guns! The agents make BIG commissions selling you variants of whole life policies. Make it clear that you will ONLY buy TERM life, and let them know the conversation is over if they try to sell you anything else. Insurance is pretty much a ripoff game. If you buy anything other than term, most of what you are paying is the agent’s big commission. That’s why he has a BMW and a weekend cottage and the lake and a big boat and you’re struggling to survive. Term only. Conversation over. Got it? Wishing you the best.