Children bring as much joy to a home as they do an entirely new set of responsibilities. Whether you are expecting your first child, have just had your third, or are looking at managing life as a single parent, buying life insurance probably hasn't been at the top of your list. It should be, though. A life insurance policy is the best way to protect your children's financial future. From here forward, the question is no longer if you need life insurance, but rather what kind you need and how much you should buy.
Life Insurance Options
While you may hear several different names, there are really just two types of life insurance products that you'll wish to consider. Term life insurance provides a specified death benefit if you pass away within a set number of years, which is the term of that policy. Permanent life insurance, sometimes called whole or universal life, is a life insurance policy that both provides coverage for your lifetime, and that can serve as an investment tool with its built-up cash value.
Assess Your Needs
The USDA periodically updates its figures on the cost of raising children in this country, and the reports are never encouraging. In fact, the latest report tells us that the average cost to raise a child, without considering inflation or college, is $245,000. As household incomes vary and these figures also adjust based on region, the agency has developed a calculator to help parents determine the cost of raising a child. A needs assessment to purchase life insurance for newly divorced parents may be somewhat different, but the life insurance options remain the same. The life insurance advisors at IntelliQuote also provide a comprehensive needs assessment through a brief series of questions.
Obtain Coverage for Both Parents
Regardless of whether you are a dual or single-income family, it's recommended that both parents in the household obtain coverage. The services of a stay-at-home parent are often grossly undervalued, and the cost to replace those important services should be fully covered.
Life insurance is the best way to protect your child's financial future.
A common misconception about life insurance is that it is too expensive, particularly in the wake of the added costs of a new baby. According to the 2016 Insurance Barometer Study, respondents overestimate what they believe term life insurance costs by about double. The fact is that life insurance is surprisingly affordable, and you can get the best deal by comparing quotes. IntelliQuote works with top-rate carriers and will deliver multiple quotes within a matter of minutes so that you can make the best choice for you and your family.
Life insurance is much easier to obtain and more affordable the younger you purchase a policy. For example, a policy that costs $15 a month for a healthy 30-year-old might cost $35 a month at age 50. This is because you are more likely to have developed health issues as you age, so it is best to lock in the best rates while you are younger.
If you are a new parent or seeking life insurance for newly divorced parents, don't put off the decision to protect your family's financial future. A life insurance policy can replace income, pay for college, and leave something behind for your family. While many companies today provide life insurance, workplace policies aren't enough as your needs assessment is likely to illustrate. Contact us with any questions, to start your needs assessment, or to request a quote.