Guest Post: Claire Atkinson
Life Insurance Tips for New Parents
If you are a new parent, do you have the type of life insurance that will provide you with adequate coverage now that your young family is growing? There are certain things to take into consideration about life insurance once you start having children.
1. Do you have enough insurance?
• When you initially invested in life insurance, you bought enough coverage for yourself and possibly your spouse. Now that you are a new parent, you will need to check out the coverage you currently have to see if it is enough for a family. If you have more than one insurance policy, be certain to check the coverage on all of them. You may want to add to your insurance coverage if you find your current policies somewhat lacking.
• Your coverage should be adequate to handle five times your income, any debt you may have, and college tuition for your children.
2. Who are your beneficiaries?
Once you start having children, you will want to add them as beneficiaries to your life insurance policies. You may have your spouse as your beneficiary at the current time, but children who come along throughout your life should be added as contingent beneficiaries. Until your children become adults, you will want to place policy proceeds in a trust and name a trustee who will take care of how the money is disbursed should anything happen to you and your spouse both.
3. Check rates
Do some research on life insurance policies to see which carriers can provide you with the best rates for the coverage you will need pertaining to a growing family. Some carriers may be offering better rates than others, and you will want to take advantage of the best rates you can find.
4. Cover your spouse adequately
You certainly want your children to be covered should anything happen to both you and your spouse, but you also want your significant other to have proper coverage if anything happens to you. Your spouse will be the responsible party who will have to raise the children, and you need to be certain that there will be adequate coverage for that to be possible and for expenses such as college tuition to be met.
5. Term or whole life?
• Term life insurance is cheaper and is for a specific period of time. You can invest in term insurance that will end when your children have reached an age where they will be on their own and able to support themselves.
• Whole life insurance is for the policyholder’s entire lifetime and will add up in cash value so that the policyholder can borrow against it if necessary. The premiums for whole life are going to be higher than term life, which does not build in cash value.
Adding new members to the family is an exciting time. You, as a parent, can experience great peace of mind if you know that you have the proper amount of insurance to provide coverage for everyone.
Author Bio: Claire Atkinson writes for Kanetix, an insurance comparison website.