Becoming a new parent is an exciting, challenging, and somewhat overwhelming experience. When your child is born, you are suddenly responsible for a whole new little person. Instantly, your top priority becomes caring for and protecting your child.
Life insurance plays an important role in protecting your baby boy or girl. It is a way to ensure financial support should something unexpected happen to you. For first time buyers, finding the right life insurance coverage can be a daunting process. Our experienced agents are happy to help.
In becoming a parent, you become responsible not only for yourself, but also for the little person who is relying on you for survival. The cost of raising a child to adulthood, for food, shelter, and childcare alone, amounts to hundreds of thousands of dollars. This does not include the costs of higher education. Life insurance can help protect your child’s future financial needs in case you are no longer there to provide for them.
The two main types of life insurance are term life insurance and permanent life insurance.
This is usually the least expensive option. It provides life insurance coverage for a specific term, typically 10, 20, or 30 years. Benefits of this type of policy include the following:
Permanent life insurance costs more than term life insurance, but it also offers important benefits. Your coverage lasts a lifetime – it does not expire at the end of a designated term. Your beneficiaries will receive death benefits, regardless of when you die. It also serves as an investment vehicle. Permanent life insurance builds cash value over time, and you can borrow against it.
Generally, life insurance can provide death benefits of from $100,000 to $1 million or more. How much life insurance you need will depend on your financial situation and your goals. As a starting point, assess the financial support your family would need if you were no longer there. Factor in:
For a rough estimate of how much life insurance to buy, multiply your annual income by 10.