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.