What Parents Need to Know About Life Insurance
My mother-in-law’s passing triggered an invasive though I didn’t want to imagine. What happens if my husband dies while our son is still a kid? Even though I was financially independent before marriage, single parent finances are an Everest of childcare costs.
Some people think preparing for unexpected loss is morbid, but it’s more macabre to forego financial planning until you’re the one left holding the funeral bill. You might think there’s nothing worse than losing a loved one, but losing them and losing your home, savings, or even way of life is salt on the wound.
In this article:
What Happens Financially If the Breadwinning Spouse Dies?
What Happens If You Don’t Have Life Insurance and the Default Parent Dies?
Is Life Insurance Actually Worth It?
Benefits and Drawbacks of Life Insurance
So… Is Life Insurance a Must-Have?
What Happens Financially If the Breadwinning Spouse Dies?
My husband is the primary breadwinner, and losing him would mean an immediate financial crisis. Nine financial problems the surviving spouse can expect:
Immediate income loss, triggering an instant cash-flow crisis.
Higher childcare costs since the surviving parent often needs full-time or extended childcare to keep or start working.
Household labor gets monetized; tasks once handled by the breadwinner (repairs, chores, admin, transportation) now become paid services.
Health insurance gap if coverage was tied to the deceased spouse’s job, the surviving parent may face COBRA costs or the scramble for new coverage.
Retirement contributions drop to zero; any 401(k) matching or ongoing retirement savings from the deceased spouse stop immediately.
Debt responsibility shifts; joint debts remain, and some individual debts may still impact the household depending on state laws.
Emergency fund depletion accelerates; savings often get burned quickly to stabilize essentials in the first few months.
Long-term financial goals stall; college savings, home upgrades, travel plans, or investments get deprioritized or paused entirely.
Lifestyle downsizing often becomes necessary; moving, selling a car, reducing expenses, or restructuring the household budget.
Although we both contribute to expenses, his lion’s share of earnings covers about 65 to 70 percent of our expenses. My earnings ($20-30k) and savings ($75k) could carry us for a year, maybe two.
Related: America’s Shrinking Safety Net
What Happens If You Don’t Have Life Insurance and the Default Parent Dies?
It would be just as devastating financially if the non-breadwinner died. Eight financial problems the surviving spouse can expect:
Immediate dip in household efficiency; the surviving parent will face the challenge of running the household and managing affairs, and challenges often cost money.
Household labor requires significant time sacrifice or gets monetized, such as paid help for cleaning services, grocery delivery, meal kits, laundry, home maintenance, etc.
Higher childcare costs for full-time care, before/after-school programs, summer coverage, and backup care.
Loss of income; even if the default parent’s contribution were small, the family loses those earnings, which may be the difference between keeping your head above water and drowning.
Unexpected transportation expenses show up; school drop-offs, pickups, activities, and appointments may require rideshare, aftercare, or shifting work schedules.
The working parent’s earning potential drops; they may need to leave work early, decline projects, use PTO, or reduce hours, which can hinder their career trajectory.
Kids may require additional emotional support; loss of the default parent can hit children harder than losing the “extra” parent. Counseling, support groups, or specialized care can introduce new financial commitments.
Lifestyle adjustments become more likely; downsizing, shifting routines, or restructuring the household budget to compensate for all the newly monetized labor.
If you quantify all that, the small or non-earner’s contribution is straight-up budget-critical. If I disappeared from the workflow, my husband would be onboarding three new vendors (babysitter, housecleaner, and money manager) and accruing debt fast.
Is Life Insurance Actually Worth It?
When I started researching life insurance rates for my husband, I realized just how messy the math gets when you’re trying to plan for something you never want to happen. I could lock in an $800,000 policy for 20 years (just long enough to get our son through college) for a little over $100 a month.
The first thing that stopped me in my tracks was the contestability period, which is a two-year window where the company can decline the payout for a wide range of reasons. They’ll frame it as “fraud prevention,” but the impact is the same. I’d pay premiums for a benefit I wouldn’t actually receive.
The second thought was, how long would a life insurance payout realistically last our family? Right now, $800,000 could last maybe 10 years… but a decade from now when inflation raises costs, maybe 8 years, maybe only 5.
The third thing I considered was my husband living past the policy’s end date, the outcome I obviously want. But I’d end up paying around $24,000 for a benefit we never used.
Then, there’s the so-called “best ROI,” which, in the coldest financial modeling terms, would be him dying the month after that two-year mark ($800,000 in exchange for roughly $2,500 in premiums). And even typing that makes me sick because the real cost of losing him is infinite. No amount of payout makes that trade worth it.
Benefits and Drawbacks of Life Insurance
Is term life insurance wasted money? Yes… and no.
You’re paying for risk-mitigation. It’s basically a “break glass if disaster strikes” budget line. And depending on your household structure, that might be completely essential or it might be lower-priority than, say, debt payoff or getting your emergency fund out of the danger zone.
Life insurance might make sense if:
You rely on one income
Childcare would financially destabilize the surviving parent
You’re a single-income household
You can comfortably afford the premiums without starving other financial goals
It might not make sense if:
Premiums would strain your monthly cash flow
You have enough savings, assets, or family support to cover the risk
The investment opportunity cost is too high for your stage of life
So… Is Life Insurance a Must-Have?
Life insurance can feel like a luxury when your household budget is already operating at maximum capacity. It’s one of those line items that only makes sense once you understand how to evaluate the options and figure out which type of policy actually aligns with your family’s realities, not just the generic advice floating around online.
And if your cash flow is maxed out? There are absolutely alternative strategies to life insurance.
