It is tough being a single parent but even tougher being a single parent while planning a strong financial future for your family. From assessing your situation to choosing the correct avenues to invest, there are ways to relieve yourself of stress when laying the foundation for your future. Life insurance is a major factor and safety net to consider while being a single parent. The following effective steps to take when managing a family and choosing your life insurance plan.
Step 1: Assess
The first step to your life insurance journey would be to assess your current financial situation as a whole. The purpose of applying for life insurance plan is to, in the case of an emergency, provide your family an additional source of income. In general, most policies should cover at a minimum, 50 percent of your annual income. It is possible that single parent may need more coverage.
Begin to ask yourself questions that may influence your financial situation. From how old your children are to who would be taking care of them if you passed away. Another large factor is your debt and how it would affect your children. Even getting down to how to pay for their college expenses.
Step 2: Decisions
Once you have assessed your personal situation, start to answer the questions that were brought up during the assessment step. Where or who will this money go to?
For example, some policies may only need to supplement income rather than replace. This plan is normally when a financially responsible relative has the ability to take care of your children. The other scenario may be that the selected guardian may not make enough income to support your children than in which your insurance plan should pay for the expense of raising children.
If you have children that are older, you may want to think of your insurance policy as a safety net. In the event of your death, the payout could aid in the costs of their college costs.
Step 3: Selection
This is the hardest step of the process. You must choose a plan that is best fit for you, your income, your children, your debt and any other financial strains you may be currently facing. $500,000 in life insurance coverage may seem like a lot but many underestimate actual future costs of living. Find a plan the works for you and your loved ones.
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