Single moms and life insurance: a necessary safety net for financial peace of mind

Financial concerns are a common thread that binds many of us, and a recent study by Life Happens and LIMRA, the 2023 Insurance Barometer Study, sheds light on the fact that 31% of people are “very or extremely concerned” about various financial issues. Retirement savings top the list, with 44% of people expressing concern, while student debt repayment follows closely behind at 18%.

Single moms’ financial worries: a closer look

Single mothers face even more significant financial concerns compared to the general population. The data reveals that single moms’ worries are elevated across the board, often by double digits. Here are three key concerns of single moms compared to the general population:

  1. Retirement savings: 58% vs. 44%
  2. Leaving dependents in a difficult financial situation should they pass away prematurely: 51% vs. 29%
  3. Affording college for their children: 40% vs. 22%

The study shows that life insurance ownership can provide financial peace of mind, with 69% of life insurance owners feeling financially secure compared to 49% who don’t own it. For single moms, 52% of those with life insurance feel secure compared to just 30% of those who don’t have it.

Despite the benefits of life insurance, only 41% of single mothers own life insurance, compared to 52% of all adults. Moreover, 60% of single mothers report having a life insurance need-gap, which represents about 5 million single moms.

Reasons for owning life insurance

The primary reason single moms own life insurance (63%) is the same as the general population: covering burial costs. However, only a quarter say they have it to replace lost income. For single moms who are the sole income earners, this statistic is concerning.

Many single moms are unaware that life insurance can address a range of financial concerns beyond covering burial costs and income replacement, such as college costs and retirement income, via a permanent life insurance policy.

Overcoming barriers to life insurance ownership

The barriers that often prevent people, including single moms, from obtaining life insurance are easily surmountable. Here are some tips for single moms to get their life insurance in order:

  1. Don’t let cost deter you from getting coverage. Many people overestimate the true cost of life insurance by three times or more. Starting small is okay, and $20 a month can typically secure a term life insurance policy that covers final expenses and provides some money for your children.
  2. Having no coverage at all can have severe consequences. The stories from Life Happens’ Life Lessons Scholarship Program show the stark reality of what happens when children lose a parent or a single mom who had little or no life insurance.
  3. Get permanent life insurance as soon as you can afford it. Permanent life insurance protects your children and builds cash value over the policy’s life, which you can tap for any purpose later, like college education or retirement.
  4. Utilize life insurance to take care of you in the future. Permanent life insurance can come with features like long-term care for when you’re older.

While purchasing coverage online is an option, don’t overlook working with an insurance professional who can tailor coverage to your needs and budget. Consulting with an agent about your life insurance needs won’t cost you and doesn’t obligate you to buy anything. If you don’t have an agent and want to find one in your area, you can use the Life Happens Agent Locator.

life insurance is a crucial safety net for single moms seeking financial peace of mind. By addressing the need-gap and exploring the various benefits of life insurance, single moms can secure their family’s financial future and ensure a stable environment for their children.

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