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FINANCIALLY Speaking Going Solo: Protecting Your Family When You Have to Go it Alone W 1. Jeffrey M. Orth is a Chartered Financial Consultant, a Certified Advisor in Senior Living, and an Investment Advisor Representative, with over 15 years of experience as a business and personal planning, insurance, and wealth management specialist. Jeff is available for group lectures and private consultations. Visit or call 408.842.2716. 158285ORM-Sep18 hile meeting with a female client recently, it occurred to me that, I serve a number of women, like her, who are the sole providers for a child or children. We all know that it’s never been easy raising a child by yourself, and single moms often face special fi nancial challenges, which add to their worries about what would happen to their children if, for some reason, they were no longer around to care for them. It’s a valid concern, and one that too often gets overlooked amidst the struggle to just get through each day. According to (February, 2005), nearly four in ten single parents do not have life insurance. Of those who do have coverage, nearly two-thirds do not believe it is adequate, and they are probably right. The typical single-parent household owns just $60,000 in coverage—hardly enough to pay family expenses for a year, let alone the almost $290,000 it takes to provide basic necessities for a child from birth to age eighteen. (Source: 2006 USDA Report “Expenditures on Children by Families”). If you’re among the many single parents who feel they need more protection, but aren’t sure where to begin, take heart. You do have options! But before you go out and buy an insurance policy, there are a number of factors you should consider first, including: The needs and expenses you are trying to cover, such as funding your children’s higher education expenses if you’re not here; paying for funeral expenses and any related medical costs; paying off debt, including your mortgage; providing income for a child with special needs; or if you don’t die prematurely, supplementing your own retirement income. How much premium can you afford? It makes no sense to purchase a policy that exceeds your monthly budget. The length of time you will need your coverage. Term policies, for example, which are generally the least expensive, provide coverage for a specific number of years only—usually 1, 5, 10, 15, or 20 years. Term policies do not build cash values, and when the term period expires, it can be prohibitively expensive to maintain the coverage. Permanent (or “Whole Life”) policies, on the other hand, provide protection for life, but they are also more expensive. Permanent policies build cash values which can be borrowed against to help fund planned expenses such as college costs, or to supplement other sources of retirement income. * Some advisors say you should own an amount of coverage equal to ten times your annual income, but that doesn’t always hold true, especially for single parents. Your needs and income are likely to change over the years and with life events, such as the birth of another child, the purchase of a new home, or perhaps a promotion at work, could change your circumstances. For that reason, you might want to consider a policy that gives you the flexibility to increase or decrease both your coverage amount, and premium, as your needs and cash flow situation changes. Universal Life policies provide this kind of flexibility. When it comes to protecting yourself, your loved ones, and your future financial security, there is simply no substitute for life insurance. For just pennies on the dollar, life insurance provides the foundation on which your dreams, and your dreams for your children, can be built—especially if you can’t be there to build them yourself. *Accessing cash values may result in surrender fees and charges, may require additional premium payment to maintain coverage, and will reduce the death benefit and policy values. Registered Representative of, and Securities and Investment Advisory services offered through Homor, Townsend & Kent, Inc. (HTK).Registered Investment Advisor Member FINRA/SIPC,16845 Von Karman Ave, Ste. 225 lrvine, CA 92606 (949)754-1700. I Fit is independent of HTK. CA Lic #0C49291 ©2016 The Penn Mutual Life Insurance Company, Philadelphia, PA 19172 GILROY • MORGAN HILL • SAN MARTIN JULY/AUGUST 2017 29