In an earlier blog post, we mentioned that there are some rather interesting holidays celebrated in America. Well today is Childrens Day! In honor of all of the children in our lives, we are discussing how having a life insurance policy can protect your little loved ones from harm and guarantee them a prosperous future.
First, it is important to understand that raising a child is an expensive endeavor. According to the US Department of Agriculture, who every year releases a report on the cost of raising a child, estimates that the average family spends approximately $235,000 over the course of 18 years. That translates to roughly $13,000 a year.You may wonder, how can raising a child be that expensive? Housing costs, food expenses, transportation, clothing, child care, health care, and education expenses all factor into the cost of raising a child. None of these expenses are minor, and this doesn’t even factor in expenses related to extracurricular activities your children may participate in.
What often makes this a manageable number for families is that these figures reflect a two parent household. However, what would happen if just one of the parents were to pass unexpectedly? Would the family be able to sustain the costs of children?
While the USDA notes that expenditures for single-parent families ($157,000+) is lower than that of a two-parent household (170,000+), it must also be noted that a single individual is covering the costs as compared to two individuals. Could your spouse manage those expenses without you?
An easy way to ensure that the answer is yes is to have a term life insurance policy. Term life can cover the cost of these expenses for years to come should you pass unexpectedly. For example, by simply taking out a $250,000 policy with a 30-year term, a parent can insure that all costs for their child is covered, even after they are children.
Just like any major purchase, parents should compare their options when purchasing life insurance. Different policies will have different pros and cons, and will be influenced by different risk factors. By using an independent term life insurance agency, like SelectQuote, parents can compare different life insurance companies and policies to find the best policy to fit their budget and lifestyle.