What Parents Can Do If They Can’t Afford Life Insurance

Last week I weighed the benefits and affordability of term life insurance should the worst happen. And, I’m still on the fence because it’s an additional expense that could be just throwing money away. Especially since there’s alternative strategies that are free or less of a gamble.

Parents have more levers than they realize, and when you stack them strategically, you can still build a runway that safeguards your kids if something happens. Think of this as your resilience blueprint: scrappy, practical, and built for real life.

In this article:

Check Employer Benefits You May Already Have

Leverage Social Security Survivor Benefits

Invest What You Can into a Brokerage Account

Lean Into Community Infrastructure

Check Employer Benefits You May Already Have

Before assuming you’re starting from zero, audit your employer ecosystem. Most companies quietly offer benefits that act as lightweight financial safety nets, but because they’re optional or buried in onboarding paperwork, tons of parents never fully leverage them.

Here’s where to look:

• Employer-Paid Life Insurance: Many workplaces automatically give you a baseline policy (often 1x your salary) at no cost.

• Supplemental Group Life Insurance: You can usually buy extra coverage through payroll deduction. It’s not always the cheapest, but it’s guaranteed issue (meaning no medical exam, no underwriting barriers).

• Spousal or Dependent Coverage: Some employers let you add coverage for your partner or kids for surprisingly low premiums.

• Accidental Death & Dismemberment (AD&D): Not a replacement for life insurance, but it does boost your payout if a death is due to covered accidents.

• Short-Term & Long-Term Disability Insurance: If the surviving parent ever becomes unable to work, these benefits protect income continuity. A lot of families overlook this layer.

• Employee Assistance Programs (EAPs): These often include grief counseling, legal consultations, will preparation, and financial assessments. All critical after a loss.

The real move is treating your employer benefits like a mini-portfolio. Even small gaps filled here reduce the pressure to take on a big standalone life insurance policy right away.

Related: Understanding and Applying for Life Insurance  

Leverage Social Security Survivor Benefits

A lot of parents don’t realize the U.S. already has a built-in version of life insurance, and it’s not small. If a working parent dies, the surviving kids may qualify for monthly Social Security survivor benefits until age 18 (or 19 if still in school). In some cases, the caregiving parent also gets benefits while raising those kids.

How to estimate the maximum Social Security survivor benefit:

• Start with the deceased parent’s Primary Insurance Amount (PIA); this is their full Social Security benefit at full retirement age.

• Each eligible child typically receives 75% of the parent’s PIA.

• The surviving caregiving parent may also qualify for 75% of the PIA while caring for children under 16.

• But the household can’t exceed the family maximum, which is usually 150%–180% of the parent’s PIA.

• If the total survivor benefits for all recipients go above that limit, each child’s payment gets reduced proportionally so the combined amount fits under the cap.

To estimate your actual payout, check your Social Security statement. This isn’t a windfall like life insurance. It’s a structured income stream designed to stabilize a family during massive disruption. Think of it like the government’s version of a contingency budget.

Related: The Morbid Talk Every Family Needs to Have (Before Life Forces You To)

Invest What You Can into a Brokerage Account

If a traditional policy isn’t a gamble you want to take (hey, who wants to lose thousands – tens of thousands – to a corporation), you can still build future protection by reallocating that same dollar amount into long-term, low-risk investment vehicles. It’s not dollar-for-dollar equivalent to life insurance, but it does create a slow-burn safety net that compounds over years.

Here’s how to operationalize it:

• Choose a monthly investment amount equal to what you would have spent on a policy premium. Even if that number is only $20, $40, or $75 a month.

• Select low-volatility, long-term holdings like broad-market index funds, target-date funds, or dividend-focused ETFs. These prioritize steady growth over hype cycles.

• Automate the deposits through your brokerage. “Set it and forget it” is the real power leverage here.

• Focus on time horizon, not market noise. Even small monthly contributions snowball into meaningful buffers over 10, 15, or 20 years.

• Use tax-advantaged accounts where possible (Roth IRA, traditional IRA, 529 plans), depending on your goals for the funds.

• Review annually, but don’t over-optimize. The whole point is consistency, not day trading during nap time with your “insurance” policy.

• Name beneficiaries on these accounts. This bypasses probate and fast-tracks access to the funds if something happens.

This approach doesn’t replace life insurance, but for families who can’t take on premiums right now or justify giving another business their money, it keeps wealth-building moving forward and gives your future self a stronger runway.

Related: How I’m Using AI to Help Manage My Investments

Lean Into Community Infrastructure

No family is designed to operate as a self-contained unit. When a parent dies, the operational workload shifts onto the surviving spouse.

The fastest way to de-risk that fallout is to intentionally build a community infrastructure before you ever need it. It’s about designing a network of humans who make your household more resilient, more flexible, and less dependent on two adults functioning at 100% capacity 100% of the time.

Think of it like diversifying your life-ops portfolio:

• Create a circle of “first-call” people for school pickups, last-minute childcare, or emergency overnights.

• Identify skill-based support nodes like the friend who’s good at forms, the neighbor who knows contractors, or the family member who can swoop in for a week.

• Map out local, low-cost resources like aftercare programs, community centers, food co-ops, parent swap groups, faith-based support systems, or nonprofit services that can step in if life tilts sideways.

• Look into community mental health resources for both the surviving parent and children. Grief impacts bandwidth, behavior, and decision quality.

• Share routines and kid logistics with at least two trusted adults. If you’re the default parent, this is crucial. If something happens to you, someone needs to know school schedules, allergy notes, the name of the pediatrician, and how to access MyChart without guessing 500 passwords.

When families isolate, every disruption becomes a crisis. When you leverage community, disruptions become manageable, predictable, and far less expensive. Because support systems save you time, money, PTO, stress, and sanity.