Life Insurance for Single Mothers

Everything you need to know about life insurance for single mother’s

Introduction

Having just passed Mother’s Day on the calendar it led me to ask a question.  Have you ever wondered about the origins of Mother’s Day?  Why do we celebrate this particular holiday each year?  Don’t get me wrong, I understand the reasons for honouring your mother, I just was wondering how this one particular day came into being.  It turns out that the roots of Mother’s Day in Canada began in the early 20th century with Anne Marie Reeves Jarvis and her daughter Anna.  Anne Marie was an activist who raised money for medicine and aid for mothers who were suffering from tuberculosis.  She died the second Sunday in May of 1905 after tirelessly working her whole life to improve the lives of others.  In 1907 Anna held a memorial service at a small church for her mother.  Mourners were presented with a white carnation, which was Anna Marie’s favourite flower.  Anna repeated this event the next year and it is acknowledged as the first mothers day event.  Anna envisioned Mother’s Day as a celebration of everything that your mother did for your family.  Interestingly, Anna felt after a few years that the event she created to honour her mother was being exploited by the flower, stationary and candy industries. Simply put, Anna wanted to create a day to celebrate her mother and her life’s work.

Keeping in mind the idea from the core of Anna’s idea, let’s take a minute and look at mothers from the perspective of their need for life insurance.  Being seems to come with an instinctive urge to protect your loved ones.  One of the ways to do this is to make sure that if something unplanned happens to you that your family’s financial security is protected.  This can be even more magnified in the case of single mothers, whose role as sole provider for their family magnifies the impact of something unexpected happening to them.

SO, with the reminder that Mother’s Day provides for us, let’s take a look at the importance that life insurance plays in the lives of mother’s across Canada.

Overview

We are going to address a few key points in this article. They include:

• Why Mothers need life insurance.
• Some facts that apply more specifically to the questions single mothers have about life insurance
• Some demographics on where you find the most mothers and single mothers across Canada
• Different types of life insurance and how they can fit the needs held by mothers and single mothers
• Some sample premium amounts for different life insurance policies for a variety of ages

Why Mothers Need Life Insurance

The protective instinct that mothers have intuitively is amazing.  Watching the willingness to put the needs of their children in front of their own needs again and again shows just how important this is.  The need for life insurance that mothers have stems from this desire to protect their family.  If a mother passes away unexpectedly with small children the financial impact can be incredible.  According to Statistics Canada the amount that the average Canadian Family spends raising a child from birth to age 17 is $293,000.  If you factor in the idea that very few children are ready to leave home at age 18 and add on those extra years of living at home, you see about a 29% increase in the cost up until age 22.  These amounts will vary depending on your family income.  The need for life insurance is reinforced by the fact that these costs take into account the idea of food, shelter, clothing and transportation for your family.  If all of a sudden the financial contributions that a mother makes to a family are lost the burden on the remaining family members could be devastating.  Life insurance can help a mother feel secure that if she isn’t around that her family has the financial security to cope with

• Child care costs
• Schooling bills
• Healthcare Costs
• Housing and food related expenses

What Single Mothers Need to Know Before Buying Life Insurance

When you are a single mother the pressure you feel financially is magnified because you are the primary breadwinner as well as caregiver for your family.  In general single mothers express that they often feel more concerned than the general public with regards to issues surrounding the financial security of both themselves and their families.  With the skyrocketing costs of everyday living the stress that these single mother households feel has only increased.  If there is so much stress felt by this demographic why do they not address the security of their family in the worst case scenario?  When surveyed, the answer often relates back to the idea that they feel like life insurance is too expensive.  What you can see from the information below is that this isn’t necessarily the case and the best thing you can do as a single mother is speak to someone about getting the right coverage for you.

Facts Related To Mothers In Canada

Here’s a little bit of demographic information about how the number of mothers in Canada breaks down by province.

Table: Number of mothers in Canada (including biological, adoptive and stepmothers), by province

Country/Province	Mothers in Canada (In thousands)	Mothers in Canada (Percentage %)
Canada	9,821	100.0
Alberta	1,059	10.8
British Columbia	1,320	13.4
Manitoba	349	3.6
Newfoundland & Labrador	164	1.7
New Brunswick	226	2.3
Nova Scotia	293	3.0
Ontario	3,783	38.5
Prince Edward Island	43	0.4
Quebec	2,279	23.2
Saskatchewan	305	3.1

Percentage (%) of mothers by province in Canada

Types of Life Insurance Available for Mothers

Term Life Insurance

Term life insurance provides the highest amount of coverage for the lowest initial premium.  This is because term insurance has renewals built into it.  A renewal is a point in the future where the premium will increase.  This is usually detailed in the name of the product.  Term-10 is an example, this will renew every ten years and the premium will increase a scheduled amount laid out in the initial policy. 

Term insurance is an ideal solution for providing a high amount of coverage when the need is not permanent.  For example, to help cover the cost of raising a family if you were no longer here.

Permanent Life Insurance

Permanent life insurance policies come in a couple of different forms.  You will hear the names ‘Whole Life’ or ‘Universal Life’.  These products have a similar trait in that the premium for them is set when you apply and never changes.  You will find that initially permanent life insurance has a higher premium than term life does.  However, if you are covering a permanent need (like funeral expenses) this is the best option for offsetting that type of expense.

How Much Life Insurance Do Mothers Need?

When you are trying to decide how much life insurance you need you should consider an exercise called a ‘calculating your needs analysis’.  What a needs analysis does is take stock of your financial situation as it stands right now.  You need to plan for right now because no one knows when they will die.  You need to plan as if it happened yesterday and your family needed the money today.  Allowing for that you will want to consider things like how many children you have and how long they will depend on you for financial support.  What debts do you have (mortgage, credit lines, consumer debt) that you would like your family to be able to pay off immediately.  Finally, are there things that you feel like you would like to help with?  Examples could be making sure that education savings are topped up or some supplemental income for your loved ones.  Add in final expenses related to funeral costs and you will be able to total up an amount that is the death benefit for the policy that you should be applying for.

Insurance Needs Calculator

How Much Does Life Insurance For Single Mothers Cost?

Below you will find a table that illustrates the premium for term-10 coverage for a single mother in Canada.  Although the example says it is for single mothers the rates would be the same for all healthy females who are non-smokers.

Expert’s Viewpoint

No one knows what the future holds, the value of protecting the financial security of your family if you are a mother or a single mother is immeasurable compared to the cost of not doing it.

Simon Huften – President Life Insurance Canada

Table: Single Mothers Term Insurance Rates

Here is a comparison of term life insurance premiums for single mothers across different age groups, focusing on a 10-year term policy assuming standard rates for non-smoking mothers.

Parent Type	Age	Term Length	Coverage Amount	Monthly Premium Range	Savings With LifeInsuranceCanada.com
Single Mother	25	10-Year Term Insurance	$100,000	$6.75 – $10.71	$3.96
Single Mother	30	10-Year Term Insurance	$100,000	$7.02 – $11.07	$4.05
Single Mother	35	10-Year Term Insurance	$100,000	$7.39 – $11.43	$4.04
Single Mother	40	10-Year Term Insurance	$100,000	$8.58 – $17.19	$8.61
Single Mother	45	10-Year Term Insurance	$100,000	$10.42 – $22.95	$12.53
Single Mother	50	10-Year Term Insurance	$100,000	$14.49 – $30.15	$15.66
Single Mother	55	10-Year Term Insurance	$100,000	$22.59 – $43.02	$20.43
Single Mother	60	10-Year Term Insurance	$100,000	$34.14 – $67.59	$33.45
Single Mother	65	10-Year Term Insurance	$100,000	$52.44 – $108.96	$56.52

Insurance Choices for Single Moms Based on Age and Factors

There are a few things that will affect the premiums that moms pay for life insurance. 

Make sure that you remember the following:

• Age matters – Life insurance premiums are calculated based on either your exact age or the age you are closest to.  This means that in reality today is the day when you will get the best premiums on life insurance that you can ever get.
• Health status – if you have pre-existing health conditions it doesn’t prevent you from getting life insurance.  You need to apply and have the insurers underwriters tell you what they think. You may be surprised and get the coverage you need within your premium budget
• Are you a smoker – Smokers pay higher life insurance premiums than non-smokers.  If you have coverage in place as a smoker and you decide to quit smoking for a year you may be able to apply to have your rates reduced.  

Selecting the right style of coverage is important as well.  Term insurance covers those temporary needs (think about expenses related to raising kids) because they will go away and the need disappears.  Permanent coverage is for the expenses that are for sure in life, like funeral costs.  Remember, the different styles of policies have different premium calculation processes, so if permanent coverage doesn’t fit into your budget then opt for all of the coverage you need as a term plan.  In our opinion, having coverage you need is the most important part to support your family if something unexpected happens.

Number of single mothers in Canada by age group

Here’s a bit more demographic information on the age distribution of single mothers in Canada:

Top Reasons Single Moms Own and Avoid Life Insurance

The reasons that single mothers own life insurance include:

• Covering the cost of a funeral and other final expenses
• Paying off debts like a mortgage to ensure housing security for their family
• Ensuring that financial security is in place for future goals like education funding
• Providing financial security to beneficiaries

Weigh this against the reasons that some single mothers don’t get life insurance:

• They believe that the premiums would be too expensive
• They have other priorities in their monthly budget
• They are unsure of which type of life insurance to get
• They haven’t taken the time to apply for coverage
• The thought of death is unpleasant

Don’t let the negative thoughts outweigh the positive reasons to own life insurance.  Protecting your family is worth it.

Source: LIMRA

Case Studies: How mothers benefited from having life insurance

As a mother, imagine a situation where you have passed away unexpectedly.  Your family is in turmoil because the loss of someone so important to the home is tragic.  Unfortunately, I have been involved in situations where this has happened and it is heartbreaking.  Obviously, you can’t control life’s unexpected events, what you can do is plan for them.  This planning makes all the difference in the world when it comes to what happens next for your family. There are two potential outcomes.  

1. The first is when you had a plan in place and your family was able to take time, get the support they need and not have to worry about financial pressure that comes with time away from work while they recover from losing you.  
   
2. The second option is that after a few days people need to return to work because there wasn’t a plan in place and there are still bills to be paid.  Kids are left with far less support and to their own devices to try and figure out how to grieve and move into this new phase of life they had thrust upon them.   

Obviously, one of these scenarios sounds much better than the other.  I can tell you from experience that families that have the time that they need to process this type of change without financial pressure are far better adapted years into the future than ones left to their own devices.  All it takes is making sure that you have a life insurance plan in place.

Mothers With Life Insurance Feel More Secure

Many people have heard the term ‘Maternal Instinct’ somewhere over the course of their life.  What is this concept?  It is the idea that there is an instinct, which is a natural, inborn behaviour that exists in mothers.  This instinct doesn’t necessarily provide you with an internal roadmap to helping raise your children (this is a bit of a misnomer), what it does do though is motivate a feeling of protection over your family that makes many mothers feel like they are willing to make sacrifices so that their children are protected.  One of the ways to protect your family is with life insurance.  Don’t ignore that instinct.

Source: For more insights visit this LIMRA article on how ‘Mothers Instinctively Want to Protect Their Loved Ones.’

Infographic: Life Insurance For Single Mothers

Life Insurance Planning Tips for Mothers

“Life insurance is very important for mothers, but mothers can sometimes be overlooked in financial and insurance planning. Mothers are the cornerstone of a family. They take care of their families, and being insured is another way to do this.”

Alison Salka, Ph.D. Principal Research Consultant at Life Insurance Marketing and Research Association (LIMRA) | Source: Insure.com

As was mentioned previously, the younger you are when you establish a life insurance policy the better off you tend to be in the long run.  Younger people have lower premiums and tend to be in better health.  The other advantage to applying while younger is that your family medical history plays a role in the insurers decisions.  So the younger and healthier that your parents are, the better that is for you as well.

Remember as well, having some sort of coverage in place is better than nothing.  If you see a permanent need but can’t afford permanent insurance right now you are better off having term insurance in place than leaving that bill unaccounted for.  

Make sure that as a mother you aren’t overlooked, make sure you have the right plan in place.

FAQs

Q: Can I name minor children as beneficiaries of a life insurance policy?

A: Yes, you can name a life insurance beneficiary of any age.  If you name someone under the age of 18 you will need to make sure that there is a trustee appointed.  This is a responsible adult who will control the funds on behalf of the beneficiary until they reach the age of 18.

Q: I have life insurance through my benefit plan at work, isn’t that enough?

A: While having a group insurance policy that provides you with insurance is a wonderful benefit to have from your employer you need to remember one thing.  You really don’t control this policy.  Yes, you can name a beneficiary, but it is your employer that controls the details on the insurance policy.  And if you change jobs your new employer may not offer the same coverage so having a plan outside of your employer is a really good idea.

Q: What happens to a life insurance policy after a divorce?

A: If you are new to being a single parent but had a life insurance plan set up when you were married you need to make sure that your agreement with your former partner addresses the life insurance policies.  One key thing to remember is that the insurer is legally bound to pay the proceeds of the policy upon your death to the last person you told them the beneficiary was. If this is your former partner/spouse that is who gets the money when something happens to you.  Make sure that you keep beneficiaries up to date.

Conclusion

As is always the case, the most important thing you should take away from this article is that no matter what your situation is, you should really consider setting up a life insurance plan.  If you are a mother or single mother and there are people in the world who financially depend on you it is one of the best things you can do.  Mother’s inherently feel a need to protect their loved ones, owning life insurance is simply another form of protecting the people you care about most if the worst case scenario happens.

Hopefully everyone had a happy Mother’s Day in 2024 and many more to come!

LIfe insurance seems complicated and unpleasant.  No one likes planning for what will happen when they die, particularly if you are a mother with a young family.  The dream is growing old together.  Life sometimes throws curve balls though and wouldn’t you feel better knowing that there was a plan in place to help deal with the unexpected?  Reach out to an insurance advisor who can help you figure out the right fit for your insurance needs.  The team at LifeInsuranceCanada.com can do this.  They will work with you to find the right solution and then they shop the market to ensure you always receive the lowest rates available.”

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