As parents, we know one of our most important jobs is to provide for our children. We feed, clothe and house them. We see to it that they get a good education. We make sure they have opportunities to explore and develop their talents.

We’re there for them in so many ways.

But what happens when we can’t be there – when parents die before children are grown?

Life insurance is one way children’s material needs can be met after the demise of one or both parents. For parents in their 40s or younger, the cost-effective insurance option is term insurance. Term life insurance pays out a predetermined amount of cash within an agreed-upon term. For example: if the term limit were 10 years, and the policy set for $500,000, that amount would be paid out no matter when the death occurred – within the 10 years.

To decide whether to purchase term life insurance, and then how much insurance to buy, parents need to consider personal circumstances, including:

Age and the number of kids
What’s needed for an only child graduating college is substantially different from the projected needs of a second grader with two younger siblings. Taking into account the projected needs of each of your children makes the choice of the right term life insurance a uniquely personal decision for each.

The wage-earning capacity of each parent
If the parent who has died was the family’s major wage earner, then the insurance needs to replace that source of income, calculated over a number of years. Even if the parent who dies was a stay-at-home mom or dad, their loss means that child-care and other services they provided may now have to be purchased.

Other needs that might be served by a term life payment
End-of-life medical expenses and funeral expenses can cost thousands at a time when a surviving spouse is least able to cope with added financial stress. Term life insurance provides the necessary cash to cover those extra expenses.

Resources of extended family
Grandparents or other relatives with means may set up an educational trust, or help out in other ways. But don’t assume anything; candid discussion should result in a written life insurance plan to which all agree.

No amount of money can fully compensate for the loss of the love a parent shows every day. But careful planning that includes life insurance is a lasting testament to that love and care- one your child will come to appreciate as they mature into the adult you’ve helped them become.

Related posts

• Old Insurance Policy May be Key to Buying New Home
• A Website for Emotional Rescue from the Economy
• The Problems of Inheritance
• Lack Of Health Insurance Is Life Or Death Matter
• Smart Shopping: Getting and Protecting the Best Price