The importance of life insurance may not have crossed your mind until you decided to become a parent. First of all, let us congratulate you on this new chapter of your life. Having a baby brings a bundle of joys along with a lot of responsibilities. Your child will be a big priority in your life and you know you will do everything you can to make sure their lives progress without financial hitches, whether you are there or not.
You never know what life may bring, there are always ups and downs. Getting a life insurance policy gives financial security to your family in case something happens to you.
Before you go out and start looking for various life insurance companies, check out some valuable tips that we have for you below:
Analyse Your Needs:
To determine how much life insurance to buy, think about your family’s financial needs in the case you were not there to provide for them. To calculate the amount you need, use this 3 step process:
1. Multiply your annual salary by the number of years that you want the life insurance policy to replace income.
2. In the above answer add other financial obligations such as debts, funeral expenses and college funds for your children. If you are a stay-at-home parent, add the cost of services you provide that would have to be replaced, such as child care.
3. From that, subtract savings, any existing funds or any other life insurance coverage you already have.
To make this even simpler, use our free life insurance calculator, which will take you through the whole process and can help you estimate how much coverage you need.
What Type of Policy to Buy:
There are two types of life insurance to choose from, Term life insurance and permanent or cash value life insurance, most commonly known asWhole life insurance, although there are several types.
New mothers and fathers usually opt for term life coverage of 20 to 30 years because it is affordable, and will provide protection until your child reaches a mature age. However, if you feel that your needs are long term or there is someone who will count on you financially for the rest of your life such as a child with special needs, then a whole life or permanent life insurance plan will work best for you.
People who are interested in leaving life insurance benefits for their loved ones, or have large estates that may be subject to estate taxes after their death should also consider choosing whole life insurance.
Always Look for Best Life Insurance Rates:
Compare life insurance rates FROM all the top companies to see who offers the best rates. Always work with an independent agent as they offer A variety of options to choose from. You can even do this from the comfort of your home by doing online life insurance shopping. Just fill in this simple form on the left and get an instant life insurance quote in less than 30 seconds!
Don’t Waste Too Much Time, Take an Action:
The more you delay the more it will cost. Life can be random, you never know what troubles you’re going to face, it’s better to get your loved ones covered as soon as possible.
Life insurance rates are dependent on health and age. The older you get the more it will cost, so it’s wise to lock life insurance rates when you are young and healthy. This allows you to live a full and happy life, but make sure you don’t go mountain climbing before your insurance policy comes in effect.
Buy Life Insurance for both Parents:
Most of the time both parents are working to contribute to a household and it’s child care expenses. That’s one of the biggest reason that both spouses should get life insurance.
If there’s a case that only one of them is working while the other is taking care of the house and child, they should get covered too. A partner who is a homemaker and a stay-at-home-parent provide valuable services such as child care and home care that the surviving parent would have to pay to replace. Therefore it’s important to take out life insurance on both mother and father.
How to Setup Beneficiaries:
A beneficiary is someone who will receive the life insurance benefit upon your death. Most of the time your spouse is the primary beneficiary. Naming your young children is not a wise idea. If the beneficiary is minor when you die, the life insurance company cannot pay the benefit until court comes in and appoints a guardian.
Another option is to hire a lawyer to build a trust and then name the trust as beneficiary. A trustee is then appointed who can be your spouse or any close family member that will manage the trust according to your instructions.
These tips will help you throughout the process of choosing and buying life insurance. Please feel free to use our instant life insurance quote engine to get the best rates in the convenience of your home.
Welcome your baby with a gift of life insurance and a joyful life!