Why Single parents need Life Insurance too

If you're parenting solo, it’s twice as important to plan

We all know too well that raising a child in a two-parent household is tough - but raising a child solo is a whole different ball game!

And it's a responsibility more and more Australian parents are taking on.

Jump Ahead

Single-parent families have become increasingly common even in the LGBTQIA+ Community.

We know that, as an LGBTQIA+ person (or someone who goes without labels entirely), you have specific parenting and Life Insurance needs.

Parenting by the numbers in Australia today

According to the ABS June 2021 report, Labour Force Status of Families,

• Australia has 6.1 million (83.4%) couple families with 1.6% of them being same-sex couples.
• 1.1 million of these families (15.0%) are single parent families with 79.8% of these being single mothers.
• The vast majority (81.8%) of single parent families with children and dependants, were single mother families.

Managing expectations

When couples with kids take out Life Insurance, they usually do so with the expectation there will always be a surviving partner left to care for the children, should one of the family adults unexpectedly pass away.

Single parents do not have this luxury.

Raising kids solo creates twice the risks

While it’s important for anyone with dependents to have their Life Insurances in place, you could argue single parents raising kids solo, need Life Insurances the most.

Nobody cares for a child, like an engaged parent

As a single parent, you’re probably the only person alweays there looking after your children.

Having a backup plan in place for the unthinkable can set your mind at ease and can be achieved by setting up a Life Insurance policy to help safeguard the future, just in case.

Do I really need life insurance as a single parent?

Raising a child is expensive - raising teenagers can be incredibly expensive (just staying).

• There can be a lot more costs involved in a single parent household compared to a two parent one, but with half the resources to fall back on when times are hard.
• By taking out a Life Insurance policy, you can get some reassurance that your extended family or friends will not have to deal with any financial debt when you pass away.

A Life Insurance policy can provide a significant safety net with a lump sum of money to look after your children if you're no longer there, or alternatively, to be held in trust until your child reaches 18 years of age.

4 Key reasons why single parents should get their life insurance sorted

1. Meeting ongoing debt & financial obligations - If you pay rent or pay a mortgage, these financial obligations are an ongoing part of life that need to be paid. Life Insurance can provide a lump sum payment to pay out the mortgage, (or even buy a nice place to live) if you're suddenly no longer around to pay the bills.
2. Meeting the cost of stabilising the surviving family members after a traumatic event - Helping a child recover from a traumatic event like the death of a parent, re-establishing their environment, and continuing their education is usually the first thing on the mind of many single parents, putting a backup plan in place, just in case.

3. Meeting the ongoing costs of raising a child - As a single parent, it’s important to consider the ongoing costs of caring for your child if you’re no longer around. There would still be the ongoing cost of living to be met - food, transport, clothes, entertainment, medical cost, and any special needs expenses.
4. Meeting the ongoing costs of educating a child - Education is both a needed routine and a passport to successfully navigating life. As a single parent, there’s the general education costs to consider, school uniform, equipment, days out and then there’s also the chance at a good education, the opportunity to go to University and have a head start in life.

Single parenting and answering your child's question, ‘What happens to me if something happens to you?’

Single parenting differs from dual parenting in many ways, but the most common difference is single parents may involve their children in more decision-making conversations and more actively model collaborative team behaviors.

Answering the regular “what-ifs” questions of parenting can be even more daunting in a single parent household

While these types of questions don’t usually occur with younger children, it's simply a matter of time before age-appropriate conversations have to be had with older children.

We all want to be able to put our hand-on-our-heart and say,

“If anything happens to me, there's a backup plan and a Life Insurance policy in place for you, with all the money we need”

Nobody cares for your kids as you do

As a single parent, you’re the one person that’s always there for your children.

• There’s a lot on your plate – shuttling your children to soccer practice, keeping the fridge stocked, helping with homework, advising on blooming relationships, and paying the bills…the list is exhaustive!
• Raising a modern child takes a modern community and while friends and family may be there to help support you, ultimately as a parent it's all resting on your shoulders.

Undoubtedly while you’re their superhero, with great power comes great responsibility.

Take a load off your mind

Putting a simple Life Insurance policy in place with sufficient levels of cover, can provide your kids with vital future financial security in case you're not around.

The immediate benefit to you today once in place, is it's one less major thing on your mind to be concerned about.

Different reasons why a person may be a single parent

Single-parent families are different to families with two parents living under the same roof. There are many different reasons why a person becomes a single parent, but we’ve found the common reasons are usually;

• They may choose this lifestyle
• They may have separated from their partner (or perhaps their partner has died), or
• They may be caring for kids of a family or friend who may not be able to currently care for them.

Common experiences of solo parents

The challenges faced by single parents vary according to circumstances, but there are common experiences shared by most single-parent families.

• Single parents often feel stressed because they try to be the perfect parent and the sole breadwinner when there are only 24 hours in every day.
• Single parents usually don't have another adult on hand they can talk with, discuss a major challenge or simply give them time out.
• Single parents worry about the future differently
• Single parents juggle more responsibilities and often feel guilty taking time for themselves.

And if you're separated and single again, you probably have to manage the additional disruptions of extended family relationships.

4 Steps when thinking about what you need

Knowing where to start when thinking about getting a Life Insurance policy sorted, can make life significantly easier.

1. Know where you stand - how long do you see your kids being financially dependent upon you?
2. Know what your monthly cost numbers are - what’s the cost to live, the cost to educate and the cost to play. Ultimately a part of every parent's plan is to have a nice place to live as part of their financial future. Read the article from our sister brand, Living happily ever after in a rented house, maybe
3. Do some research online ahead of time - read our financial blog and learn some key concepts, watch one of our fun explainer videos, How Much is Enough Life Insurance, and then learn the importance of correctly Naming your Life Insurance policy beneficiary.
4. Get professional advice - everyone is different as is their budget, their attitude to risk and security, and the type and level of support available from their network of friends and family. Decide to work with a supportive professional who has experience working with single parents

Talk to a professional to find a life insurance strategy that’s right for you.

Separated and single by circumstances?

After any separation and relationship breakdown, updating your Life Insurances and the beneficiaries is the next step, as is updating your Will.

• If you and your partner hold separate life insurance policies, dealing with them after divorce will be relatively simple.  Once you go your separate ways, you each keep your own policy.

But if you have kids to care for, you’ll want to make sure that there's a plan in place to continue to provide protection for them.

4 Things to do after a relationship breakdown

1. Know who is the Life Insurance policy owner? (usually, the one who pays the premiums)
2. Know who is named as your Life Insurance policy beneficiary?
3. Decide whether you still want your ex-spouse to be a beneficiary of your life insurance policy?
4. Decide whether you need to change the amount of life insurance in place, given your change in circumstances?

Pro Tip: If you’re not the policy owner of the life insurance policy, you may not be able to make changes to the policy – the policy owner will be required to make them.

The good news about solo parenting

There are many great outcomes single parents are creating in their families.

• The parent is typically self-reliant and confident.
• The child is typically more mature and responsible than their duel parents peers
• The relationship between parent and child is close and children learn to talk about important issues sooner, rather than later.
• Single fathers are more likely to use positive parenting techniques than married fathers.
• Single-parent families are less likely to rely on traditional gender-specific roles than two-parent families.
• Single parents tend to rely on positive problem-solving strategies rather than punishment or discipline when faced with difficult child behaviours.

Our hope for the future of solo parenting

Helping solo parents feel more confident in their financial future is an important part of what we do.

It's already hard enough to be a modern single parent in Australia, and single parents must be seen and supported equally.

For a young man to say, 'I want to be a dad' when asked the question,

'What do you want to be when you grow up?' this shouldn’t feel like a weird answer.

It's time for all solo parents to begin to plan for a safer tomorrow for their kids, just in case.