Attention all single parents: Protect your children’s future

Raising kids is one of the most rewarding things you can do in life. But along with all the joys of parenthood also come some big financial responsibilities – especially if you’re a single parent. Often, with only one income stream to rely on – even the smallest thing or an unexpected event can have major implications for the future of your children.

Life insurance is one way to get peace of mind (for yourself) while also making sure there’s enough financial security (for your children) to keep them on track should anything ever happen to you.

Planning for your children’s financial future

Single parents have to deal with their own set of challenges when it comes to financial planning. Unlike two-parent households, where expenses and responsibilities are usually shared, single-income families need to be particularly strategic in how they manage their finances. If you were no longer around, who would provide for your children? Would your loved ones be able to cover all day-to-day costs like rent/mortgage, school fees, medical expenses, food and clothing?

According to the latest ABS figures, there are over 1.1 million single-parent families in Australia, with nearly 80% headed by single mothers. Raising children solo can be incredibly expensive, and financial setbacks can have major knock-on effects for years to come.

So, it makes sense that life insurance could step in as a very important safety net – one that can ensure the future is financially protected for your children. Planning ahead takes just a few minutes of your time, but it can set your children up with a financial buffer that can provide for their needs – even in your absence.

Some of the benefits of life insurance for single parents

It might seem hard at first, but considering life insurance could be one way to provide protection for your children’s future. In essence, it will give them a lump-sum payment (to your nominated beneficiary) if you pass away. These funds can be used to cover everyday expenses and – most importantly – reduce the burden on other family members who might need to step in and provide care for your children.

• Covering everyday living costs: The cost of raising a child doesn’t stop if you’re no longer around. A life insurance payout can help manage daily expenses like rent, groceries, transport and utilities.
• Paying off debts: If you have outstanding debts like a mortgage or personal loans, then life insurance can help prevent these financial obligations from falling onto your loved ones.
• Paying for their education: Education is one of the biggest investments you’ll make for their future. A life insurance payout can help cover school fees, extracurricular activities and even university expenses – giving your children the best opportunities for success.
• Peace of mind for you: Knowing that your children will be financially set up, even if you were no longer around, can give you invaluable peace of mind. Life insurance can help protect their standard of living and means they can continue to grow and thrive, no matter what the future holds.

Choosing the right life insurance policy

Things like life cover may be worth considering as a single parent. And when it comes to choosing a policy to protect yourself – and your young ones – there are some considerations you’ll need to make when comparing, including the amount of cover, the cost of premiums, your beneficiary options and more.

Decide on how much cover you need

When deciding on the amount of life insurance needed, you may want to keep e your financial responsibilities in mind, including rent or mortgage payments, childcare, and school costs, as well as future education expenses. You may also want to consider how much your children would need in order to maintain their current quality of life if you were no longer able to provide for them.

Compare your preferred policies

There are different types of life insurance policies available in Australia:

• Term life insurance: Cover for a set period – pays a lump sum if you pass away during the policy term.
• Life insurance: Life-long cover with a payout upon death, and for some policies a payout for a terminal illness diagnosis.
• Income protection insurance: While it’s not the same as life insurance, this type of policy can give financial support if you are unable to work due to sickness or injury.   

Each option has its own pros and cons, so you’ll want to spend a bit of time reviewing the policies and applying for one that meets your financial needs.

Policy exclusions and waiting periods

Before taking out a policy, check for any exclusions or waiting periods. Some policies might not cover pre-existing conditions or have specific terms around payouts. It’s very important to read the policy documents to ensure you understand exactly what’s included in your cover.

Choose your beneficiary

A beneficiary is the person who will receive the life insurance payout in the event of your passing. For single parents with young children, you may want to consider choosing someone you trust to manage the funds in your child’s best interest until they are old enough to manage the funds themselves.  

If you haven’t yet considered life insurance, it may be  time to take a look at your options and consider protecting you and your family, at every life stage.

A small investment today could make a huge difference for your children’s future – giving you peace of mind that, no matter what happens, the ones you love most will be financially prepared for what’s ahead. Learn more about Guardian Life Insurance or request a quote online today.