No matter what your family looks like, life insurance can play a powerful role in helping to provide for your kids in the event of your death. But your family’s makeup can play a role in determining the types and amounts of coverage you might need. Here are the answers to a few things parents like you might be wondering.
Why should parents have life insurance?
Life insurance helps cover the loss of income your family would suffer if you were to pass away. It’s a way to help protect your kids even after you’re gone and provides you with options to secure your wishes for their future.
This insurance can be used to cover basic expenses, such as groceries or childcare, but it can also be used to pay rent or your mortgage, your child’s school tuition, end-of-life expenses and any debts you may leave behind.
Experts recommend that you carry at least 10x your annual income in life insurance.* While you might get some coverage through your district, it’s important that you look carefully at the numbers — you may need additional coverage to reach the recommended amount and secure your children’s future.
What should I know about life insurance as my family’s primary earner? Or secondary earner?
As your family’s “breadwinner,” you are likely the first person who comes to mind when people consider the need for life insurance. And they’re not wrong — the loss of your income could significantly impact your kids’ way of life if you were to pass away. Basic needs aside, a gap in your life insurance coverage could result in the need to cut back on your children’s extracurriculars, narrow their secondary school options and make it difficult to manage the costs of things like tutors and daycare.
Secondary earners are not to be overlooked, though. Your income provides a critical segment of your family’s income and losing it along with you would also impact your family’s ability to fund its basic needs. Losing you without sufficient financial protection could very well have the same impact on your kids’ future opportunities as the loss of a primary earner.
What should I know about life insurance as a single parent?
Because you may be the sole source of income for your family, life insurance can play a particularly significant role in helping to protect your children. If there is not another parent to care for them in your absence, having this financial safety net becomes absolutely critical. In addition to financing their basic needs, it can also help provide your children with the security of housing, meal preparation, childcare services and more. This coverage — especially when combined with a trusted guardian — could go a long way toward helping your children get by in your absence.
What are some life insurance considerations for stay-at-home parents?
The role of a stay-at-home parent is an incredibly valuable one, likely involving childcare, keeping up with housework, and managing other household affairs. Their need for life insurance should not be underestimated, as their loss would create a deeply felt need in your children’s care. Without them, you would likely need to pay for childcare or take some time off work while you figure out what to do next — and a life insurance payout could help support you as you shoulder this additional responsibility.
Who should I name as my life insurance beneficiary?
It is common to name your partner as the beneficiary of your life insurance. This would provide them with the payout and help them provide for your children after you’ve died. In the case that you do not have a partner, or that you’d like to be more explicit in your wishes for the division of the money, you may want to name your children. Depending on their age, that’s a bit more complicated.
Children under 18 or 21, depending on the state, are not allowed to receive life insurance payouts. It is, however, often possible to set up a life insurance trust in your child’s name and name that trust as the beneficiary. A trustee, perhaps a spouse or another trusted adult, is then named to manage it in the meantime. An attorney can assist you in setting this up.
Life insurance options for NEA parents
The recommended 10x your income in coverage* might sound expensive, but NEA members like you have exclusive access to a suite of affordable life insurance options, such as NEA® Group Term Life Insurance. Combined with any coverage your district may provide, these options can help you round out your family’s protection without placing you under undue financial burden.
Explore life insurance options to help protect your family today.
* CNN Underscored, How much life insurance do I need?, February 2024
Group Insurance coverage is issued by The Prudential Insurance Company of America, a Prudential Financial company, Newark, NJ. The Booklet-Certificate contains all details, including any policy exclusions, limitations, and restrictions, which may apply. Contract Series: 83550
Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
The policy issued by The Prudential Insurance Company of America may not be available in all states.
1081030-00002-00
