Should New Parents Invest in Life Insurance?

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With being a new parent comes new responsibilities and considerations to take in life. You are no longer thinking about just you or your partner’s life and future. You are now in charge of the upbringing, future, safety, and care of your children, whose lives are just about to begin.

Setting them up for a prosperous life includes planning and letting them know what to do when things get hard. Among many things, getting yourself life insurance can be one of the best decisions you can make for them.

It may seem like it’s just one more thing to think about, but it can save both you and your family a lot of worries if something happens to you. 

Here are some important points you should think about when considering life insurance.

When is the Right Time?

No time is better than the present when it comes to life insurance. Whether your family is just starting to grow or you are still in the planning stage on having kids, try to get an insurance policy as soon as possible. As you age, the price of the life insurance you are eligible for will also go up. So better to lock in on a rate now and get lower rates.

There are advantages in getting life insurance before having kids, like getting better rates and lesser hassle in the future. When you finally have children, all you have to do is update the policy that covers you, and you’re good to go. There is also nothing wrong with getting life insurance after having children too.

Insurance policies can cover a certain number of beneficiaries and be updated depending on the terms and conditions. Providers will only require you to submit a couple of documents to update your policy. However, when you plan to have more children, and the coverage amount may seem insufficient for them, you can opt to adjust your policy’s coverage amount as your provider will allow.

What is the Right Policy?

There are various types of policies offered by a range of insurance providers out there. Generally, insurance policies are either permanent/whole life or term life

A permanent life insurance policy covers you your whole life and will benefit heirs or family whenever you pass. Meanwhile, term policies will only give your family death benefits when you pass away during a certain specified period. Term life insurances are often limited from 10 to 30 years of coverage. Beyond that, your beneficiaries will not be eligible to receive any amount once you die. 

While it can be complex and more expensive, permanent life insurance is highly ideal if you plan to grow a family in the future. If you already have children or want to be insured until the kids graduate college, term life insurance will be a more affordable option. 

Sources for Life Insurance

You can sometimes get insurance coverage from your employer, but you also have the option to get it on your own. It’s best to choose a policy that accurately fits your needs, lifestyle, and future plans.    

There are plenty of life insurance providers, but the ones you can trust are those with established credibility. The best life insurance providers have often been around for a long time. Insurance agencies that have maintained their business for long periods of time are more trustworthy with your money. Reach out to them and ask for a quote or learn about your options.

Most of the known life insurance providers can offer a wide range of permanent insurance options. If you are looking for a more hassle-free term insurance provider, you can try providers like Bestow. It has been vetted and considered one of the most convenient term insurance providers. Read Bestow life insurance policy reviews online to learn more.

Some companies offer life insurance policies for employees, but this can be risky for someone growing a family. Relying solely on a company’s offered life insurance is not advisable because if you were to resign or be terminated, you would instantly lose the coverage.

 How Much Will It Cost?

The average cost of life insurance in 2021 ranges from $40 to $55 per month. This varies based on the type of insurance you choose, as well as other significant variables. Along with health conditions, a person’s sex is one important matter in determining the cost of an insurance policy you have to pay. A 35-year old male will require a bit higher premiums compared to a 35-year old female.

When you are just starting, it is best to manage your finances and set a budget for the life insurance you want. Discuss it with your financial advisor to find a policy that will cover your needs without compromising your financial goals and budget.

Should You Insure Your Kids?

You might be tempted to purchase insurance for your children, but this is usually not a smart move for a parent. It can be a waste of money as it offers low rates on return while requiring a long-term commitment. Coverages for children’s life insurance are also low, and, in general, it does not provide adequate coverage in the event of losing a child to make up for the money lost in paying the policy.  

Next Steps

As your family grows, it’s essential to consider their future needs. There are cheap and easy ways to improve your life insurance, like adding benefits for other situations such as illnesses and accidental deaths. Some policies and providers will let you invest a portion of your payment.

There are many details to be aware of when getting an insurance policy, such as required medical exams to pay for and pass and assets that can either help or hinder your policy coverage, including mortgage, debt, savings, and sources of income.

Invest for Your Kids

It is exciting to build a family and watch your children grow, but it can get pretty scary, too. The reality is that in a snap of a second, anything can happen. As parents, prepare your children and your whole family for anything in the event of the unthinkable. Start planning and get yourself insurance that you can avail, not just for you but also for them. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.