Life Insurance for New Parents

Life Insurance for New Parents

Nothing changes your attitude and your perspective quite as fast as having a baby. As soon as that new life arrives, he or she changes everything, from the way the parents see the world to the way they plan for the future. Things that once seemed unimportant now loom large – from funding a future college career to finding money for diapers.

Life insurance coverage is also a suddenly important fact of life when a new baby arrives on the scene. While both parents may be capable of paying their own way and earning their own living, that is most definitely not the case with the newest member of the family. Every responsible parent needs to plan for the future – and that includes planning for a future where one or both parents are gone from the scene. Buying life insurance coverage is an essential part of being a parent, and the time to start shopping for that insurance is now.

New parents have lots of decisions to make, but life insurance should definitely be one of them. A comprehensive life insurance review should accompany every significant life event, including the birth or adoption of a child. It is important for parents to provide the protection their children will need – and the funds they will need – should the worst happen.

When shopping for life insurance it is important to consider a number of factors, including of course how much life insurance coverage will be needed. In order to determine this number it is important for the family to determine their level of monthly expenses, and to factor in the costs of the new baby. The amount of expenditures will provide a good guideline for insurance shopping, but it is always a good idea to build a cushion into the figure by buying more life insurance coverage than you think you will need.

A good rule of thumb for life insurance shoppers – including new parents – is to purchase coverage equal to between 20 and 30 times the annual income of the person to be insured. In families where both parents work a family life insurance policy can provide protection for both partners. In families with one breadwinner it is important to purchase life insurance coverage that will be sufficient to cover the family’s cost of living for many years.

Even families with two breadwinners may want to consider purchasing this level of life insurance coverage. The sudden death of one partner may mean that the spouse left behind will need to quit his or her job to take care of the children for at least a couple of years. It is important for the death benefit to cover family expenses for the intervening years, and so it is important to review coverage levels from time to time.

In fact conducting a periodic review of insurance coverage is always a good idea, and many families choose to do this exercise on an annual basis. . Insurance needs change from time to time, and conducting a periodic review is the best way to ensure that there is sufficient coverage in place for all family members, including the newest addition.

Life Insurance for Children

Life Insurance for Children

While most adults recognize the importance of having life insurance for themselves, the idea of insuring the lives of their children is often overlooked. It is important, however, for parents to consider the possible life insurance needs of the whole family – including their children – when making their insurance decisions.

The life insurance needs of children will vary according to a number of factors, but it is still important to include the kids in any life insurance calculations. Children who earn any kind of income, whether it be in the exciting world of Hollywood movies, in television commercials or just in the family business, may need to have life insurance in place as protection for those earnings.

But even children who do not earn an income can benefit from life insurance, especially a whole life or universal life policy that provides an element of investment as well as a death benefit. Over time those policies can build up a very large cash balance, and that cash balance can be accessed even while the policyholder is still alive. The cash balance of a universal life or whole life policy can be used for any number of things, including funding college tuition, providing the down payment for a first home or even buying a car for the new driver.

In addition to these potential benefits, life insurance can provide peace of mind to the entire family. The peace of mind provided by life insurance is the same regardless of the age of the insured, and many families choose to carry coverage on all members of the family. Family life insurance policies can be a good way to accomplish this goal, but it is often more cost effective to buy separate policies for each child.

That is because the cost of life insurance for children can be extremely low. Children are very cheap to insure compared to adults, and that can make adding them to an existing policy, or buying them a life insurance policy of their own, quite a cost effective investment. When you consider the fact that whole life and universal life can provide a good return over many years it is easy to see why so many parents are choosing to extend their life insurance coverage to the youngest members of the family.

Of course it is still important to shop around as much as possible in order to get the best coverage at the lowest possible price. When comparing policies it is important to compare not only the premiums but the performance of any investment products that come bundled with the insurance. And of course it is essential to make sure that the life insurance companies under consideration have been highly rated by rating agencies like AM Best and Moodys. Dealing only with highly rated life insurance companies will reduce the chances of problems down the road and allow the children to enjoy the benefits of their policy for many years to come.