Life Insurance for Single Parents
When you're the only parent, there's no second paycheck and no backup at bedtime. That makes planning more important, and a little more complicated. Life insurance is one piece. The other pieces decide who raises your kids and who manages the money until they're grown.
Raising a child to adulthood
Estimates of the cost to raise a child from birth to 17 have run well over $300,000 for a middle-income family in recent years. You don't need to insure every dollar, but a good target covers:
- Your income for each year until your youngest is 18 (or through college)
- Childcare and activities a guardian would need to pay for
- Any debts, including a mortgage
- Funeral and final expenses
- An education fund, if that's a goal
Subtract Social Security survivor benefits, which minor children of a working parent may receive, and any savings. Our coverage worksheet walks through the math.
Choosing a guardian
Without a will naming a guardian, a Texas court decides who raises your children. If the other parent is living and has parental rights, they'll often be first in line. If that's not who you'd choose, or if you'd want a backup, put it in writing.
- Name a guardian and an alternate in your will
- Texas also allows a separate written declaration of guardian, signed and witnessed
- Talk with the people you're naming first
Don't name your kids as beneficiaries directly
Insurance companies can't hand a large sum to a minor. If you do, a court may need to set up a guardianship of the estate, which is slow and costly, and your child typically receives everything outright at 18. Better options:
| Option | How it works | Good for |
|---|---|---|
| Revocable living trust or testamentary trust | The trust is the beneficiary; a trustee you choose manages the money under your rules | Larger amounts; control over when kids receive money (e.g., at 25) |
| Custodian under the Texas Uniform Transfers to Minors Act | An adult custodian manages the money until the child reaches 21 | Smaller amounts; simple setup |
| A trusted adult as beneficiary | Money goes to that person with an informal understanding | Not recommended: no legal duty to use it for your kids |
The guardian (who raises the kids) and the trustee (who manages the money) can be the same person, or different people for checks and balances.
Coverage on a single income
- Term life gives the most coverage per dollar. A 20-year term on a healthy 35-year-old can cost less than $1 a day for $500,000.
- Laddering: a large 15-year policy plus a smaller 25-year policy can cost less than one big long policy.
- Check child support orders. Texas courts can order a parent to carry life insurance to secure child support. If you receive support, ask whether that's in your order.
Your single-parent action list
- Buy enough term coverage to raise your kids
- Write a will naming a guardian and an alternate
- Set up a trust or UTMA custodian as beneficiary
- Tell the guardian and trustee where documents are
- Review every few years as the kids grow
You carry a lot. Let's lighten one piece.
We can help you find affordable coverage and set up the beneficiary so the money reaches your kids the way you intend.
This guide is general education, not tax, legal or financial advice. Product features, issue ages and prices vary by carrier and state and change over time.