- Life insurance for single-parent families
Since a child depends on your income, you need life insurance. As a general rule, you should purchase a policy with a face amount equal to at least 10 times your annual income (e.g., a $500,000 policy if you earn $50,000). However, the amount of insurance you will need will depend on various factors, such as:
your debts
your financial expectations (e.g., how long your children will need the money).
You can designate your children as beneficiaries to receive the death benefit upon your death. This is the sum paid to the beneficiaries of an insurance policy upon the end of the insured person. This capital is generally tax-free and is delivered in a single payment.
This life insurance calculator will help you estimate how much coverage you need.
Generally, it would help if you appointed a trustee who will look after the money on behalf of your children until they reach a certain age. For example, it could be the other parent of your children, a grandparent or another family member. The predetermined period often corresponds to the majority’s, but not necessarily. (In Quebec, insurance proceeds are paid to the guardian of minor children, not their trustee.)
Do you receive a pension for an ex-spouse or children? Also, plan to ensure these payments. If something happened to your ex-spouse, his estate might not be enough to cover his support obligations.
You can chat with an advisor. He will present all the available insurance options and answer your questions. Most advisors now offer to meet people by phone or videoconference. Find an advisor near you.
- Disability insurance for parents
Disability insurance can provide you with income if:
you become disabled; and
you are still unable to work after a specified period.
You must already have a stable income to qualify for disability insurance. Most employers offer this kind of coverage. But if you lose your job, you also lose this coverage, in addition to protections from other sources.
If you’re on contract with no benefits, talk to an insurance advisor about your disability insurance options.
What will you do if you can no longer work? Disability insurance can help you
- Critical illness insurance for parents and children
Critical illness insurance pays a lump sum if you are diagnosed with a life-threatening covered illness. It could be cancer, heart attack or stroke. This lump sum is paid after diagnosis (subject to certain conditions, such as survival for a specified period). You can then spend it as you see fit.
You might wonder if the recent coronavirus, COVID-19, would be a covered diagnosis. It depends on your insurance company. For example, Sun Life provides coverage for clients who suffer a critical illness due to COVID-19.
Here are the illnesses covered by a Sun Life critical illness insurance policy
This blanket proved invaluable to Louise, a single mother to eight-year-old Owen. She had been diagnosed with breast cancer and had to take sick leave. His employer, which offered short-term disability insurance, paid him three months’ salary. However, Louise could not work for more than a year. Fortunately, she had critical illness insurance, thanks to which she received $100,000. She was then able to pay for additional childcare, pay off her mortgage and meet her daily expenses while undergoing chemotherapy. She did not have to dip into her retirement savings thanks to this money.
See how critical illness could affect your finances with this essential illness insurance calculator.
You might also consider getting critical illness insurance for your child. Suppose it was Owen who fell seriously ill. Louise can use the money from the necessary illness insurance policy to pay for other expenses, such as purchasing medications that are not covered by the provincial health insurance plan.
Should you buy critical illness insurance for your child?
- Accident insurance for parents and children
Accidents happen every day, and since they are unpredictable, it is best to be prepared. This is where accident insurance comes in. A severe accident can compromise your ability to return to work. The insured capital can reach 250,000
