No matter what your family looks like, life insurance can play a powerful role in helping to provide for your children in the event of your death. But your family’s makeup can play a role in determining the types and amounts of coverage you might need. Here are the answers to a few things that parents might be wondering.
Why should parents have life insurance?
Life insurance helps cover the loss of income your family would suffer if you were to pass away. It’s a way to help protect your kids after you’re gone and provides you with options to secure your wishes for their future.
This insurance can be used to cover basic expenses, such as groceries or child care, but it can also be used to pay your rent or mortgage, your child’s school tuition, end-of-life expenses and any debts you may leave behind.
Experts recommend that you carry at least 10 times your annual income in life insurance, according to a 2024 article published by CNN, "How much life insurance do you need?" While members might get some coverage through their district, it’s important to look carefully at the numbers — you may need additional coverage to reach the recommended amount and secure your children’s future.
What should I know about life insurance as my family’s primary or secondary earner?
As the family’s "breadwinner," you are likely the first person who comes to mind when people consider the need for life insurance. And they’re not wrong — the loss of your income could significantly impact your children’s way of life if you were to pass away. Basic needs aside, a gap in life insurance coverage could result in the need to cut back on your children’s extracurriculars, narrow their secondary school options and make it difficult to manage the costs of services like tutoring and daycare.
Secondary earners are not to be overlooked, however. This income provides a critical segment of your family’s earnings and losing it, along with you, could also impact your family’s ability to fund basic needs. Losing you without sufficient financial protection could very well have the same impact on your children’s future opportunities as the loss of a primary earner.
Who should I name as my life insurance beneficiary?
It is common to name your partner as the beneficiary of your life insurance. This would provide them with the payout and help them provide for your children after you’ve died. If you do not have a partner, or you’d like to be more explicit in your wishes for the division of the money, you may want to name your children as beneficiaries. Depending on their age, that can be complicated.
Depending on the state, children under 18, or survivors under 21, are not allowed to receive life insurance payouts. It is, however, often possible to set up a life insurance trust in your child’s name and name that trust as the beneficiary. A trustee, perhaps a spouse or another trusted adult, is then named to manage it until they reach the legal age. An attorney can set this up.
Life insurance options for NEA/MTA parents
The recommended level of 10 times your annual income in coverage might sound expensive, but NEA and MTA members have exclusive access to a suite of affordable life insurance options, such as NEA Group Term Life Insurance. Combined with any coverage provided by your district, these options can help you round out your family’s protection without placing you under undue financial burden.
Explore life insurance options to help protect your family today at www.neamb.com/products/life-accident-insurance.
