New Parents

Life Insurance for New Parents

Having a baby is a major milestone for every couple. Naturally, you want to protect your bundle of joy and do everything possible to give him or her the brightest future possible. If you’re considering life insurance as one of the options for securing your child’s future, we’ve highlighted some items to make the discussion with your insurance broker quick and painless.

Here’s what you need to know:

There are 2 basic types of life insurance: Term life and Whole life.

Term life insurance gives you protection for a predetermined period of time. For example, a 20-year term life policy locks in your premiums and coverage amounts for the entire 20-year term of the policy. After that, unless you cancel, the policy renews annually with new rates. Whole life insurance gives you coverage for your whole life, not just a period of time. It differs from the term in that it typically accumulates cash value and premiums usually don’t increase as your health and age change.

Buy based on your priorities

While it sounds nice to have a $1 million life insurance policy, you may not need that much coverage. One way to determine how much is enough is to consider future costs for things that are a priority like child care, paying off your mortgage, and providing for your child’s education.

The earlier you buy the better

Life insurance rates are based in part on age and health so the younger and healthier you are, the less you’ll typically pay for coverage.

Make sure both parents are covered

Even if there’s only one breadwinner in the household, it’s still wise to make sure both parents have coverage. The value a stay-at-home parent adds in child and home care services would need to be replaced if the unexpected happened, so their financial contribution should not be overlooked.

Cover baby too

The cost to add a whole life insurance policy for new babies and small children is so affordable that it makes good financial sense to add a policy for them as well. No matter how their age and health status changes, their coverage will always be there.

During happy times like the birth of a child, it’s never fun to think about death, but taking a few minutes to talk things over with your insurance broker will give you peace of mind for years to come.




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