Buying Life Insurance: 5 Tips for New ParentsSubmitted by Center for Wealth Planning, Inc. on March 7th, 2017
Buying Life Insurance: 5 Tips for New Parents
Written by Jackie Waters March 2017
Having a child is an important event in life that pushes people to think about planning their financial future, and life insurance is a significant tool that parents can choose. New parents have to handle myriad responsibilities as well as emotions, and the worry of finances should not dampen your joy. It pays to plan in advance, which is why you should start looking at insurance even if you have just conceived. However, going about the process may be confusing, particularly if you are first-time buyers, but don’t worry; buying life insurance isn’t as daunting of a process as some other major purchases can be.
83 percent of Americans* do not have life insurance because of the belief that it is too expensive, whereas their estimates were almost thrice the actual policy prices. So here are some handy tips that can help you and your spouse select life insurance:
1. Begin young
When it comes to life insurance policies, the younger and healthier you are, the more you can save in the long run. Applying for a life insurance policy means that you need to undergo a medical assessment, which will help determine your approximate costs. Such policies get more expensive with a person’s age, which is why you should buy one at the earliest. For example, a young couple aged less than 30 years may be charged about $30-40 monthly whereas the same policy purchased by a 50-year old will cost more than $100 a month.
2. Research your options
Life insurance policies are of different types and vary according to the company, so take your time to learn the pros and cons of each to figure out which will be the most beneficial for your family. Life insurance broadly falls under two categories- Permanent insurance and Term insurance. Enlist the help of a reliable financial advisor to explain your options well and offer the right advice, and start meeting with insurance agents to get information on the latest policies and rates.
3. Know where to buy your insurance from
If you are purchasing a policy to ensure your family’s financial security after you are gone, you do not want them to face hassles in getting the money. Do your research to find a company that has top-notch ratings from an independent rating agency.
4. Define your goals
You need to decide on the amount of coverage you require for your family. This will depend on factors like the costs you expect your family to incur in the future, any home mortgage, education, and childcare expenses. Setting a specific goal (for example, to fund your child’s college tuition) will help your financial advisor to shortlist the most suitable policies for you.
5. Choose insurance for both parents
It is a common misconception that life insurance for a stay-at-home parent is not necessary. But think of it this way—if you are such a parent and something happens to you, who will take care of your baby? It will be almost impossible for the surviving parent to work full-time while also raising the child. Getting life insurance for both parents will ensure that your child is protected, no matter what scenario arises.
If you wish to secure your new family’s financial future, getting an insurance policy is a move that you need to consider at the earliest. Use these tips to get the best life insurance and take the necessary steps to ensure that the latest arrival is protected, even in the future when you may not be around.
*”The shocking statistics behind the life insurance coverage gap” - LifeHealthPro.com, Aug. 30, 2013
Life Insurance guarantees are based on the claims paying ability of the issuer. Jackie Waters is not affiliated with LPL Financial or Noel-Schopen Financial Services.