3 Real Parents Talk About Life Insurance Details

It’s pretty easy to approach another parent on the playground and say, “Great storage on that stroller! Is it easy to fold?” It can feel more awkward to casually ask, “So what term length did you go with for life insurance? Is $500,000 enough, or should I aim higher?”

The thing is, I really believe that sharing knowledge between parents is a valuable part of our collective “village,” and I wish we talked as freely about the big financial choices as we do about car seats or kid-friendly meal plans. One big perk of being a writer is that “it’s for an article” smooths the way to ask otherwise-nosy questions and get to be part of a more open discussion about the financial plans we make to protect our families. 

Kari P.: Simple Life Insurance for a Family of Four

Life insurance, like any other kind of insurance, is the kind of thing you purchase but hope never to use. Part of the value is the security of knowing a financial safety net is in place to care for your kids, keep the family home or follow through on education choices.

Kari P. and her husband, Edwin, have two boys (age 4 and 7) and a $500,000 policy. Edwin was working as a contractor, without the added protection of workplace benefits.

“Life insurance was a priority for us to add some security for our family in case anything were to happen to Edwin,” Kari says. “We decided on this amount to ensure if anything happened, the mortgage could be paid off, as Edwin is the primary earner in our household.” 

Mortgage is often the biggest single debt families hold, and the family home is significant both emotionally and in terms of day-to-day life. It’s also good to consider what other expenses you might want a well-rounded policy to cover, such as college savings contributions or any debts.

Bryan A.: Multiple Policies to Fit Family Needs

Bryan A. and Kate have two children (age 5 and 8) and several policies. “My work offers life insurance for me at three times my base salary, which turns out to be about $250,000,” he says. “We also have life insurance on Kate through my work, which is one times my base salary at $80,000. Finally, also through my work, each kid has a life insurance policy of $10,000.” 

But Bryan’s main source of coverage is a 25-year, $750,000 term policy he purchased independently about five years ago. Life insurance coverage through an employer often ends if you leave the job, so it’s a good idea to have a separate policy.

Another advantage of getting your own coverage is that, as in Bryan’s case, life insurance through an employer may be based on a simple salary multiple, rather than a true consideration of your financial situation. Bryan says he calculated how much life insurance he needed by adding up debts like the house, student loans and credit cards, and then adding roughly five years’ worth of income to that total. 

Bryan says, “I feel like I have a responsibility in both life and in death to make sure my wife and kids have the ability to be safe and grow without leaving our house and environment because of finances. I want them to have every opportunity to succeed and be happy, even if I am dead. My death might be an emotional roadblock, but hopefully not a financial roadblock.”

Bridget S.: Life Insurance Matters for Single Parents

Bridget Shirvell is a single mom to a 4-year-old. She bought a 20-year, $500,000 term life policy when she was pregnant. 

“Honestly, when I originally got it, it just felt like one of those things you should do when you're having a child, along with setting up a will. It felt like crossing something off my to-do list,” she says. “At the time I was purchasing it, I wanted the life insurance to cover the remaining mortgage plus 50 percent. I don't really have a real reason for that, but I wanted there to be time to sell my house if that made sense or keep it, plus support my child, and have either a college fund set up or an after-high-school fund, if college wasn’t the right option for my child.”

The life insurance policy offered financial peace of mind in a particularly scary time. “I was diagnosed with cancer when my child was 9 months old, and I’m so grateful I have the policy as I think it would likely be hard for me to get it now.” (Thankfully, she says treatment has gone well.)

She says, “Being diagnosed, a family crisis, the death of a few family members and friends and the pandemic has really driven home the idea of how fragile life is and for me how important it is to have people and finances in place for my daughter to be taken care of.”

Finding the Right Coverage for You

In many cases, applying for life insurance can be a straightforward process. But it’s also important to acknowledge that this isn’t everyone’s experience. Talking with a financial advisor or even a good friend who’s been there before can help you figure out a way forward.

Kari pointed out that health issues can sometimes pose unexpected hurdles. “I just remember it was extremely frustrating to find reasonable life insurance due to (my husband’s) asthma diagnosis, even as an otherwise completely healthy 32-year-old.” 

Bryan admitted that it’s been challenging to find insurance for Kate, which is why she still only has coverage through his work. “The first time we tried to get her life insurance, she was pregnant and they wouldn’t start a policy until at least six weeks after delivery… We will eventually insure her for more, but haven’t gotten to it yet.”

Comparing life insurance companies can help you find insurers who are more prepared to offer you the best coverage. It is possible to get coverage during pregnancy, and some insurers take a more favorable view than others toward various health conditions. Taking a look at how underwriting works might help you understand the inner workings and feel more ready to find a company that works for you.

Continuing the Conversation

Reviewing life insurance options, whether on your own or with a partner, can be an opportunity to think about your values when it comes to finances and what you’d like to model in your family. 

Bryan says, “I feel like I never understood debt enough growing up, and as a young adult.” When he and Kate got married, they made a point to practice discussing financial priorities, from getting life insurance to writing their wills and even making sure all family members have passports so they’re able to travel.

Bridget says, “I also think it’s important for parents to talk about finances with their kids.” She plans to dedicate time to talk to her child about finance and insurance—once she’s old enough. “Right now, at 4… she tells me to ask Nana for money because Nana always buys her things. So clearly some work to be done there.”

In the meantime, it can be good to connect with fellow parents. Bridget’s good friend helped talk her through key info like the difference between term and whole life when she was shopping for a policy. Bridget says, “I wish that talking about finances wasn’t such a taboo subject, and I think it’s becoming less so but it would be nice to know other people’s reasonings for their life insurance.” 

Thanks to parents like Bridget, Bryan and Kari, we’re off to a good start.

Still trying to figure out what's right for you? Check out our handy flow chart that might help you wrap your mind around your options.

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