Here's What Single Moms Should Know About Term Life Insurance

As a single mother, your role extends beyond being a primary caregiver to also being the family's breadwinner and fulfilling various other responsibilities. Given the unique challenges that come with being a single parent, it becomes increasingly crucial to prioritise and secure the future of your children. The prospect of leaving your child vulnerable and unprotected is a daunting scenario that no parent wants to contemplate. In this context, the term insurance policy stands out as a powerful and indispensable tool.

It goes beyond providing a financial safety net; it serves as a robust shield against unforeseen circumstances, offering a sense of security and stability. It ensures that, even in your absence, your child/children are well-protected, both emotionally and financially.

In this article, we will discuss how term insurance plans can be beneficial for single moms.

What Is Term Insurance?

A term insurance policy stands out as a cost-effective and straightforward life insurance product. In the event of your untimely demise during the policy tenure, it ensures that your family receives a predetermined amount, known as sum assured. It is crucial to understand that a term insurance policy is a pure risk cover. So, if you outlive the policy term, you will not receive any payout.

Here are some of the features of the term Insurance policy -

● Premium Payment Frequency

The primary purpose of investing in a term insurance policy is to safeguard your family's financial future. It replaces your income to maintain their lifestyle and fulfil their dreams. To uphold this commitment, consistent premium payments term are required. You have the flexibility to choose the payment frequency that suits you the best - whether it's monthly, quarterly, half-yearly, or annually.

● Customisable

A term insurance policy is highly customisable, allowing you to tailor it to your family's specific needs and preferences. Here are some of the ways to do that -
○ Consider your family's financial situation and decide whether they should receive the claim amount as a lump sum payout or a regular monthly income for several years.
○ Depending on your future income stability, you can complete term insurance premium payments early in life and enjoy the coverage for an extended period of time using the limited pay option.
○ You can also include the increasing cover option that automatically increases the term insurance cover amount over time, requiring no manual intervention. This provides a hassle-free way to enhance your family's financial protection as circumstances evolve.
○ There are several other customisable options available.

Why Should Single Moms Consider Investing In A Term Insurance Policy?

In India, where the cost of raising a child is substantial, it becomes imperative for single parents to prepare for the unexpected, including the unfortunate possibility of sudden death. For solo parents, an ideal solution is an insurance plan that is both affordable and adjustable, and a term insurance policy perfectly aligns with these needs. It provides a practical and cost-effective way to ensure financial security for your child in case of unforeseen circumstances.

Reasons Why Single Parents Should Buy A Term Insurance Policy

Here are some of the compelling reasons why you, as a single mom, should consider purchasing a term insurance policy -

1️⃣Financial Security In The Face Of Uncertainty

A term insurance policy acts as a silent guardian for your family, shielding against life's unexpected challenges. Its primary advantage lies in securing their financial well-being even in the most adverse circumstances. Should you die during the policy term, it provides a fixed sum of money to your nominee. For single mothers, who bear the significant responsibility of being the sole breadwinners for their families, any disruption in their ability to provide can have far-reaching consequences. In such cases, a term insurance policy becomes a powerful risk mitigator, ensuring your family's financial stability when faced with unforeseen events.

2️⃣Preserves Your Child's Dreams

Term insurance secures the dreams that single mothers hold for their children, even in the face of unexpected challenges. By acting as a substitute for your income, it ensures that your child can pursue their dreams without compromise, leading a life of comfort. This financial support extends to cover educational expenses, extracurricular activities, unforeseen emergencies, etc. As a single mom, you can find relief, knowing that your children's aspirations will withstand the challenges of life, no matter what.

3️⃣Covers Your Child’s Necessary Expenses

Moreover, single parents should factor in the expenses associated with caring for their children in their absence, particularly when dealing with very young children. This entails essential needs such as food, clothing, medical and other expenses, in addition to entertainment and daycare for the younger ones. It is important to adopt a comprehensive approach to these expenses to ensure that the individual responsible for your child in your absence receives sufficient financial support.

4️⃣Handles Your Financial Obligations

Your debts and financial obligations don't vanish with your demise. As a single parent, it is vital to assess the extent of debt and financial commitments you will be leaving for your child. Opting for a term insurance policy can prevent an unintended burden on your loved ones during the grieving process. In the unfortunate event of your early demise, it serves as a safety net, assisting them in settling your share of the loan.

5️⃣Comparatively Cheaper

Term insurance, with its affordability and simplicity, becomes an accessible lifeline for single mothers navigating the complexities of the financial world. It shines as a clear and cost-effective solution, enabling even those with limited resources to forge a strong financial foundation for their families.

6️⃣Aids In Fulfilling Your Personal Aspirations

Term insurance emerges as a powerful symbol of empowerment for single mothers, providing the tranquillity to pursue their personal aspirations and foster individual growth. Juggling the responsibilities of parenthood solo, single moms may inadvertently sideline their own well-being. The term insurance policy enables them to direct their attention towards personal and professional pursuits, all while being confident that their children's future is well-protected and secure.

Things To Keep In Mind While Buying Term Insurance As A Single Parent

As a single parent, make sure you keep these things in mind before you buy a term life insurance policy -
● Choosing The Right Nominee
Choosing the right nominee for your term insurance policy is critical, especially for single parents. Typically, your dependents, often your children, should be designated as the nominees.

● Appointee For Minors
Even if your child is a minor, you have the option to designate them as the nominee. However, it is crucial also to assign an appointee. An appointee is the individual appointed by you and authorised to receive the benefits under the policy on behalf of your nominee, particularly if the nominee is under 18 years of age at the time of claim payment.

● Tailoring The Claim Payout
Term insurance offers you the flexibility to opt for either a single nominee or multiple nominees. When selecting multiple nominees, you can allocate a certain percentage of the sum assured to each individual. For instance, if you are a mother to more than one child, you may choose to appoint your other kids, or perhaps a sibling or another relative, in addition to your primary nominee (your chosen child). Whether your goal is to ensure equal distributions among your children or you have other specific considerations in mind, this flexibility allows you to tailor the allocation of funds to align with your individual preferences and priorities.

Looking For Term Insurance?

Here are two best life insurance policy for single mothers –

1. ABSLI Salaried Term Plan [UIN: 109N141V01] The ABSLI Salaried Term Plan is crafted for salaried individuals, offering comprehensive protection with customisable options. Whether securing your child's education, sustaining your lifestyle, or covering daily expenses, it ensures unwavering financial support in the face of the unexpected.

Some Of The Key Features Of The Plan
● Choose from a diverse range of 4 plan options to match your unique protection needs perfectly.
● Enjoy life insurance coverage that spans up to age 70.
● Select from versatile options for death benefit payouts, whether you prefer a lump-sum or monthly income.
● Additional protection with the inclusion of an inbuilt terminal illness benefit.

2. ABSLI DigiShield Plan [UIN:109N108V11] ABSLI Digi Shield term insurance offers financial security at various life stages, whether you're a parent, newly married, a young individual, or managing a home loan.

Some Of The Key Features Of The Plan
● Limited pay (accelerated premium payments)
● Sum assured reduction (decreasing cover)
● Whole life coverage up to 100 years of age
● Riders such as the Critical Illness Rider and Accidental Death Benefit Rider, etc.

Wrapping up!

Term life insurance for single mothers serves as a vital resource for them, particularly those who carry the weight of both caregiving and providing for their families. Its affordability, customisation options, and role as a financial safety net bring peace of mind amid life's uncertainties. Beyond preserving their children's dreams and covering essential expenses, a term insurance policy allows single mothers to chase personal aspirations with confidence. It serves as a cornerstone for single mothers, fostering stability, security, and the freedom to pursue a fulfilling life for both them and their children.