Evaluating insurance needs
Dave talks to a divorced, single mom about insurance needs.
QUESTION: Christian is 32, a teacher, and a divorced, single mom. She's on Baby Step 2, and she has questions about life insurance. Dave walks her through the situation, and gives her sound advice.about life insurance.
ANSWER: You probably don’t need the full 10 to 12 times your income like I recommend for most people. The only dependent you have is also dependent upon his dad. And from what you said, his father seems perfectly able to take care of him.
I’d get a good term life policy equal to the amount that you’d like to supplement your son’s care. Make sure his dad—your ex—is not the beneficiary. The beneficiary should be a family trust, formed upon your death, and the money would go into that trust for the benefit of your child. You set the terms of the trust. It should not be controlled by your ex.
I’m so glad you’re thinking about these things, Christian. It shows you’re an intentional lady, a fine mom, and a good planner.