The 3 Best Tips for New Parents Buying Term Life Insurance
We all like to think of growing up as the moments in our lives where one chapter ends, and another begins. For many, there is no bigger occasion than the day we start families of our own and become parents. This often coincides with making big life decisions that help ensure the safety of the family’s future. One such decision we see made frequently at Low Cost Life Insurance is parents buying term life insurance.
A term life insurance policy offers a financial safety net in the event of an untimely death in the family. It guarantees that there will be money to help pay for medical bills, funeral costs, and a future college education for your child.
Just how important is life insurance for families? According to the American Council of Life Insurers, at the end of 2012, over 3.6 million term life insurance policies were in effect nationwide. These policies provide a total of over $1.1 trillion dollars in coverage, protecting the future of many families.
If you’re a new parent and thinking of buying term life insurance, here are the 3 best tips to consider:
1. Start young.
Unlike opening a credit card or buying a house, a term life insurance policy will be unaffected by your financial history. It is purely based on your age, and your overall health. When you apply for a policy, you’ll undergo a medical evaluation that helps determine what your costs will be.
For a couple in their 20’s, the cost of opening a term life insurance policy will be much lower than those in their 30’s and 40’s. For example, a healthy 20-year old man could be charged $30-40 a month for $500,000 in coverage on a 20-year term life insurance policy. A 50-year old man with the same health would likely pay over $100 a month.
However, even if you are older, it is still better to get started now rather than later!
2. Insure both parents.
As the overall cost of living increases, it is very common these days for both parents to contribute financially to the family. Whether it’s sharing the cost of a mortgage or splitting the bills, it feels good to have a sense of equilibrium between us and our other half. This is also true for families where one parent quits work to care for a young child. The value you provide in caring for a dependant is just as important as the income your spouse earns! For that reason, we recommend both parents buying term life insurance.
3. Set goals.
The amount of coverage you need for your policy will largely depend upon the costs your family will expect to incur years from now, such as child care, education, and a home mortgage. For parents buying term life insurance, it is best to move past the notion of seeing your coverage as only a dollar amount. Instead, think of it as having a specific use, such as paying off college tuition or a mortgage.
When you set goals for your policies, it will be much easier for us to sell you the exact insurance that benefits you most!
Are your loved ones being looked after? If you’re starting a new family, or simply wanting to protect your current family, give us a call. We’ll help answer any questions you might have, and determine the best policy for your family’s future.