Among the most important reasons to carry life insurance, is to protect your children. Perhaps the greatest change to accompany a divorce is the modification in parenting. After a divorce, many parents find themselves without the help of their ex and become single parents. These single parents need to continue to care and raise their children but in the absence of the financial help and support of their former partner. If this is you, you will need to come up with a plan to sort out your new financial situation.
As a single parent, you may be the sole financial provider for your household. If you were to pass away, your children would no longer have your income to support them. Your children will continue to need money for all of their necessities as well as planning for the future. Although someone, whether it is a family member or close friend, will be appointed by the state as a caregiver to your minor children, it may not be easy for them to financially support your young children.
Life insurance could protect your children in the event that you pass away and their other parent is not in their life. You can calculate your desired benefit amount on your own. You will want the life insurance to be able to take care of your children until they are all at least 18 (21 may be better especially with the increasing cost of attending college). Take this age and subtract it from your youngest child’s age now. For example, if your youngest child is 7 years old and you want to provide for him/her the age of 21, that leaves you with 14 years of taking financial care of your child. You will then want to take this number and multiply it by your yearly income. If you earn $40,000 a year and you multiply that by the 14 years from above, your loss of life benefit should be $560,000. The more you can help your children the better, but be sure the monthly premiums are not a financial strain.
Brandon Legal Group will work with you to craft a divorce agreement that keeps the needs of the children at the forefront of the conversation. One of the ways of protecting your children’s best interests post-divorce is a clear understanding of what happens with your life insurance proceeds should you or your (soon to be) former spouse pass away. Call us today for a free initial consultation.