Why it's important for fathers to get life insurance

Emmet Pierce

The role of fatherhood in America is changing as many men take on homemaking chores, but the need for dads to have life insurance remains undiminished.

"Thinking ahead for our families, we want to do what we can to prepare for the unexpected," says Dr. Bruce Linton, author of "Becoming a Dad, How Fatherhood Changes Men." "People need to be protected."

Why fathers need life insurance

Life insurance for fathersThe Pew Research Center in Washington, D.C. reported in March 2013 that the way fathers spend their time has changed a great deal since 1965. According to Pew's "Modern Parenthood" report, on average U.S. fathers have nearly tripled the amount of time they spend with their children to 7.3 hours per week. The amount of time dads spend on household chores also has increased, doubling to about 10 hours each week. The Pew report explores how the roles of mothers and fathers are changing as they balance work and family life. Topics include how parents spend their time, their views about their jobs, and how much they are paid.

Men who are preparing to celebrate Father's Day on June 16 are less likely to be their family's only wage earner than the dads of previous generations. Linton, a marriage and family therapist, says men are broadening the definition of fatherhood to include helping out at home as well as earning a paycheck. He says fathers are very concerned about having adequate life insurance.

Even though mothers are more involved in the workplace than before, the money fathers earn remains crucial for most families, says Marvin Feldman, president and CEO of the Life and Health Insurance Foundation for Education (LIFE), a nonprofit educational organization. According to the American Center for Progress, the median wage for women working full time in 2010 was $36,931, only 77 percent of what men earn.

Couples today typically rely on two incomes to make ends meet, he says. When fathers die unexpectedly, mothers are hard-pressed to make up for the financial loss without life insurance.

Acknowledging your mortality

Michele Borba, author of "The Big Book of Parenting Solutions," says most fathers feel responsible for their family's financial welfare, even if their wives are working.

"They want to make sure that, if they are here or not, their family is taken care of," she says.

Despite their need for life insurance, many men in America are uninsured. A 2012 study by Genworth Financial, an insurance and money management company, found that 69 percent of unmarried fathers and 34 percent of married fathers in the U.S. don't have life insurance.

According to LIMRA, an association of insurance and financial services companies, the slow economy has contributed to the large number of uninsured men. In 2012 LIMRA researchers found that consumers who delay buying life insurance do so for two primary reasons:

  1. They believe they have more pressing financial needs.
  2. They feel they can't afford insurance coverage.

Donald Unger, author of "Men Can: The Changing Image and Reality of Fatherhood in America," says insurance companies are aware of the increased involvement of fathers with their families. He says he has noticed a change in the way insurers advertise.

"You see pictures of men and young children in life insurance ads," Unger says. "That representation is somewhat new. It isn't just a guy in a business suit who is the economic head of the household. This is a much more participatory father."

What kind of life insurance policy should you get?

For most men, the need for maintaining life insurance never goes away, Feldman says. Fathers should not drop their life coverage as long as they have spouses or children who depend on their income, he adds.

Life insurance policies are divided into two basic types: term and permanent. Term life provides a death benefit but has no cash value. Term policies, which often last for 10, 20 or 30 years, generally are less expensive than permanent policies. If you take out a 30-year term policy on your life to benefit a newborn child, you'll know that the child will be provided for if you die before he or she reaches adulthood.

Permanent life insurance is more expensive than term because it offers policyholders a cash value that can be tapped into while they still are alive, says Cindy Gentry, chair-elect of the LIFE foundation. You don't need to worry about outliving a permanent life policy, because it covers you for your entire life, as long as you pay the premiums. Cash value typically grows over time. You can surrender the policy for its cash value, or borrow against it.

Even after children reach adulthood and leave the family home, they often need help with bills or caring for their own children, Feldman says. According to the U.S. Census Bureau, in 2010, 2.7 million grandparents paid for the basic needs of at least one grandchild.

If such grandparents have permanent life policies, they can surrender them or borrow against them to support to their grandchildren. In contrast, a term policy will provide no benefit as long as the insured person is living.

"A lot of people think that once the children are grown and gone they no longer need life insurance," Feldman says. "That isn't the case. The First National Bank of Dad's drive-up window stays open."