Life Insurance Planning Tips for New Parents

pregnant woman
If you are having your first baby you may be thinking about life insurance for the first time but all expecting parents should review this checklist to make sure their life insurance policy protects all their loved ones. Life insurance is all about planning so take some time, sit down and think about the following.


Coverage Amount

This amount is likely to increase whenever you have a child or otherwise add a member to your family so it is important to review and calculate the right amount of death benefit your now larger family will need to meet monthly expenses, pay for college, pay off credit card debt or even payoff a mortgage.


Policy Type, Term or Permanent?

A Term life insurance policy typically costs less than permanent policy. It is more affordable for young families without a lot of disposable income. Permanent insurance provides both lifelong coverage and an investment feature, which can be a valuable source of money that you can tap in the future. Permanent life policies are best in very stable income situations such that investments will not be lost if a policy payments can’t be maintained.

The best solution may be both term and permanent life insurance policies. The term policy provides extra coverage during the years when the children are at home, and the permanent policy offers lifelong coverage that can provide savings in later years.

Stay at Home Parents

When a new addition to a family means that a parent will transition to a stay at home role, the change in income will affect how much coverage the family needs for each parent and how much is affordable. A stay at home parent typically does not contribute income to a household but does save on child care costs. They too should have a life insurance policy to protect that contribution.

Single Parent

Single parents need protection because what they do for their families is so valuable. As care-givers and bread winners they are critical to a family and should have a life insurance policy that reflects that. Single parent budgets tend to be stretched as it is which makes term life policies a good option. A guarenteed premium for 20-30 years will bring peace of mind knowing what the cost is and the protection your children will have.

Coverage During Pregnancy

Are there any restrictions I have to consider now that I’m pregnant? If it’s early in your pregnancy, and there are no medical complications, you should be able to get life insurance. If you’re farther along and there are medical issues, it may difficult to obtain. The life insurance company may want to wait until after your child is born. That’s why I advise those that are planning to have children to get the coverage as soon as possible.

Talk with a life insurance agent, they can assess your needs, calculate the benefit and recommend the right policy for your family budget free of charge.

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