If you’re a single mom or a single dad, life insurance is a financial protection must-have. Single parents may not have another source of financial support for their children if they pass away unexpectedly, so getting life insurance to support them is crucial.
A life insurance policy creates a safety net for your child’s everyday expenses, continuing education, and care. You can make sure your children get the financial support they need by getting the right amount of life insurance coverage and choosing your beneficiaries carefully.
Why do single parents need life insurance?
If a single parent dies, the financial loss to their children can be significant if their parent was their only source of financial support. Life insurance exists to mitigate against that financial loss.
If you’re a single parent, life insurance coverage is a crucial tool to protect your family if you die while your children are still in your care.
How much life insurance do single parents need?
The exact amount of coverage you need depends on several factors.
Income: Experts recommend having a death benefit of at least 10 to 15 times your annual income. This can cover everyday expenses like bills and groceries, childcare, and educational expenses.
Outstanding debt: Your child won’t be responsible for your debts, but any co-signers will, and creditors can seize property for loans that weren’t co-signed. Your policy should last as long as your longest debt and be large enough to pay it off. This way, your family will be able to keep any assets you’re making payments on, like a car or your home.
Future expenses: If you plan to send your child to private school, pay for extracurriculars, or establish a college or savings fund for them, you can include that in your calculations.
End-of-life expenses: The average funeral costs about $8,000. You can account for these expenses in your life insurance policy so your family is not left to pay the bill.
If you add all of these amounts together, you’ll have a good idea of how much coverage your family will need to cover the financial loss that will occur if you pass away.
→ Learn more about calculating how much life insurance you need
What type of life insurance do single parents need?
Term life insurance
The best type of life insurance for most single parents is term life insurance. Term life policies are flexible, easy to understand, and affordable. With term life insurance, you can set up the term to last until your child reaches adulthood or until your debts are paid off.
A 30-year-old parent who doesn't smoke and only has one or two minor health conditions can buy a 20-year term life insurance policy with a $1 million payout for $28 to $36 per month, according to Policygenius data.
Whole life insurance
Whole life insurance, is significantly more expensive than a comparable term life policy, but the benefit of whole life is that it never expires — it will last for the rest of your life as long as you keep making the payments.
For a single parent, whole life can be a good option if your child has a disability and will be a lifelong dependent. This way, you’ll be able to leave your child with a death benefit no matter when you pass away.
Whole life policies also come with a cash value component that grows over time. This feature is usually worth the extra cost mostly for high-net-worth individuals who have maximized contributions to traditional retirement accounts, like a 401(k) or IRA, and are looking for other tax-advantaged investment options.
If you consider a whole life policy, just keep in mind that your children won’t receive the cash value if you pass away — only the death benefit.
→ Read more about the differences between term life and whole life insurance
Group life insurance
Group life insurance — also known as employer-provided life insurance — can be a coverage option for single moms and dads on a budget or who may not qualify for a personal term life insurance policy due to health or age reasons.
If your employer offers this benefit, you’ll get some coverage for free or at a reduced rate, but it usually isn’t enough to cover all of your family’s needs. If you only have employer-provided life insurance, consider buying a personal term life policy to complement your group plan.
Final expense insurance
Final expense life insurance, also known as burial insurance, is a type of permanent life insurance designed to cover your funeral and burial costs. Final expense policies are relatively expensive and have lower death benefit amounts than a typical term life insurance policy, but they are easier to get approved for.
Final expense insurance is best for people who don’t qualify for traditional coverage due to serious health issues.
Best life insurance companies for single moms and dads
Methodology
Why you can trust our picks
Our recommendations are based on internal and external expert analysis, as well as our Policygenius Life Insurance Price Index, which uses real-time data from leading life insurance companies to determine pricing trends. When reviewing a life insurance company, our editorial team uses a proprietary scoring rubric with five factors — price, policy details, financial strength, transparency, and customer experience — to assign an unbiased rating between one and five stars. These ratings are also taken into consideration as part of our company recommendations. We don’t get paid for our reviews.
Our reviews and recommendations can help you find a reliable insurer for your family’s financial protection, but the best life insurance company for you depends on multiple factors. A licensed agent at Policygenius can support you during the application process to ensure you get the right coverage for your circumstances at the most competitive price.
2024 Policygenius award winner
Brighthouse Financial
5.0
No-medical-exam option
Why we chose it
Brighthouse Financial offers competitive rates, comprehensive coverage, and application decisions in as little as 24 hours, making it a great choice for people who want to get life insurance coverage without having to take the medical exam.
Pros and cons
Pros
Extremely affordable
Instant-decision applications
Best-in-class no-exam option
Cons
Traditional term life not available in CA, IL, LA, ME, or NY
Term life applicants limited to ages 25-50
Best term life insurance for single parents: Brighthouse Financial
For single moms and dads in their 20s, 30s, and 40s, Brighthouse Financial offers some of the most affordable and convenient coverage options on the market.
The company features one of the best overall life insurance products for people age 25 and up — it offers quick approvals, no-medical-exam options, and affordable premiums.
Mutual of Omaha
4.5
No-medical-exam option
Why we chose it
Mutual of Omaha is a reputable company that offers a variety of life insurance products — including a no-medical-exam option — so that you can select the type of life insurance that best suits your needs.
Pros and cons
Pros
No-medical-exam options for older applicants
Strong financial and customer ratings
Cons
Policies are more expensive than average
Slow turnaround time
Best final expense insurance for single parents: Mutual of Omaha
Mutual of Omaha offers a variety of products for burial insurance, including simplified issue and guaranteed issue life insurance options, so people with a wide array of health conditions can get coverage that’s best suited for them.
Mutual of Omaha’s product offerings are cheaper than some of its competitors. It also offers coverage amounts as low as $2,000, which can help single moms and dads on a budget keep their premiums low.
This type of policy is available for people age 45 and up, and can be a good option for single parents who may not qualify for traditional term life.
Comparing the best life insurance companies for single parents
Company | Policygenius rating | AM Best rating | Best for |
|---|---|---|---|
5/5 | A | ||
4.5/5 | A+ |
Should you list your child as the beneficiary of your policy?
Even if you’re getting life insurance to provide for your child, you shouldn’t name a minor as a beneficiary on your policy. Minors can’t legally accept a life insurance payout.
Instead of naming your child, your best option is to set up a trust and name it as your beneficiary. You can specify how the money is distributed, how much is spent, and what it can be spent on — and a trustee will carry out your wishes. It’s also a much better option than simply leaving a will.
“A will designates guardianship, but how assets are distributed is contestable,” says Patrick Hanzel, certified financial planner and advanced planning manager at Policygenius. “Whoever the guardian is would be entrusted to provide for the minor under court supervision, but a lot could go wrong. You can define exactly what you want in an irrevocable trust.”
If you set up your life insurance policy before your trust, you’ll have to name an adult that you trust as the beneficiary. Usually, this will be whoever you’re naming as guardian of your children, whether it’s your parent, sibling, or another trusted person. It’s still recommended that you set up a trust as soon as possible so that your wishes are fulfilled after you pass.
→ Learn more about irrevocable life insurance trusts
Tips for single parents to ensure life insurance will protect your child
Share your end-of-life plans with your child’s guardian and other loved ones.
Tell someone you trust where to find important documents like your life insurance policy and contact information for any lawyers or financial advisors you’ve worked with.
Make sure they know how to file a life insurance claim and where to get the documents they’ll need to begin the process.
If you are the beneficiary of a life insurance policy but can’t find the details, you can search for it through your state’s insurance department.
Buying a life insurance policy is one of the best things you can do to protect your child’s financial future. A few simple safeguards can guarantee that your child has the financial support they need even if you pass away.
