Reported by Liku Zelleke
A survey done by Bankrate.com has come up with shocking results: 37% of parents with children under the age of 18 don’t have life insurance. The survey was done on 1,000 parents who have to balance a busy life schedule on a daily basis.
To make matters worse, even among those that were insured, it was found that about 50% of them had less than $100,000 in coverage amount. Although that might seem like a large number, it falls short of being able to cover a deceased parent’s income, paying off the mortgage or funding the child’s college education.
“We found it unsettling,” says Doug Whiteman, an insurance analyst at Bankrate.com. “This should be a wakeup. You really do need to sit down and think, ‘What if something were to happen to me?’”
Of course, people tend to want to totally avoid that question as another survey from Caring.com showed. Results revealed that just over 50% of parents have a will and 60% out of them hadn’t even updated it in the past five years.
Buying life insurance should be one of the priorities in a parent’s life. The amount of payout, as a rule, should be an amount equivalent to 10 times an individual’s income. Of course, Whiteman says, the amount will vary depending on the type of insurance and the needs and future goals of the family.
Once that is taken care of, the next thing to do is to update the will. The will is critical in assuring that your assets aren’t eaten up by the state.
“Without a will, the parents are basically giving their state the power to decide who raises their kids. I don’t know a parent who would feel good about that,” says Karin Maloney Stifler, a certified financial planner.