Life Insurance and Young Families
Posted on Mon, Feb 06, 2012
How Much Coverage Is Enough?
Your family is the most financially vulnerable when your children are young, because they are completely dependent on you for support. This is also the time when most parents struggle to balance monthly expenses while attempting to save for future costs, like college tuition.
The main purpose for life insurance coverage is to protect your family from financial turmoil in the event of your death. Merely guessing at the appropriate coverage amount isn’t enough to ensure their protection or your peace of mind. Tools like our Life Insurance Calculator will help you determine your family’s needs with more accuracy.
In general, the younger your family and the more children you have, the more life insurance coverage you need.
What Type of Insurance Is Best For You?
Many young families benefit most from term life insurance coverage. Why? Because a term policy offers insurance coverage during the time that your family is most in need of financial support. Many people expect their living expenses to diminish over time, so they prefer a policy that will mirror their financial requirements.
Term life insurance policies also tend to be more affordable than other types of coverage. Since the term life insurance only lasts for a set period of time, term policies have much lower premiums in comparison to whole life (permanent) policies.
How Prepared Are You?
Every young family should take time annually to review their life insurance needs. Here’s a checklist to get you started:
- Don’t have life insurance coverage? You need it. Go for a term policy with a carrier you can trust and premiums that fit within your budget.
- If you have an existing policy, make sure it's up-to-date with your family’s current situation. Events like the birth of a child will affect the amount of insurance coverage you need. Answer the questions in our insurance calculator with as much honesty as possible and compare the results with your current coverage.
- Decide on an appropriate term for your policy. You’ll want to be sure the policy will still be in effect throughout the years of your family’s greatest financial needs.
- Carefully designate your beneficiaries. In the event of your death, your life insurance proceeds will go directly to those listed in your policy.
- Create a legal will with pertinent information about your life insurance policy, including the full names of any beneficiaries.
Sufficient life insurance coverage with a trusted carrier is one of the best ways for parents of a young family to ensure financial protection and peace of mind for their loved ones.
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