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Life and Health


By September 1, 2011No Comments

From maternity leave, parenting and maternity classes, and readying the new baby’s room, expectant parents have a lot on their plate as they prepare for a new baby. The tasks you need to accomplish can be overwhelming, but you certainly don’t want to forget to protect your child’s future financial well-being. One area you’ll want to address is your Life insurance to determine if your current coverage will still meet the needs of your soon-to-be larger family. As you examine it, you’ll want to pay particularly close attention to the following three areas:

1. Type of Insurance. Although Life insurance policies come in various shapes and sizes, most fit under either Permanent Life insurance or Term Life insurance.

Term policies will provide you with protection for only a specified period of time and these policies don’t accumulate a cash value. Evaluate term policies to determine if they will still offer a sufficient coverage to protect your growing family. On the other hand, Permanent Life insurance policies can cover you for your entire life. They also accumulate a cash value that can be borrowed against for future expenses, such as your child’s college tuition. Do keep in mind that availability, options, and cost are greatly influenced by your health status and age. As a general rule, you’ll find the best Life insurance coverage and rate while you’re young and in good health.

2. Coverage. The addition of a child only exaggerates a couple’s desire and need to protect their family should the wage earner unexpectedly pass away. Do keep in mind that each parent, even if one isn’t earning a wage, should have a Life insurance policy. It’s a common misconception that a stay-at-home spouse doesn’t need to be insured because they aren’t financially contributing to the family. In reality, all the childcare, household chores, and so forth would still need to be done if the stay-at-home spouse were to pass away. These duties would become expenses that weren’t present when the spouse was alive. Having Life insurance on the stay-at-home spouse allows the surviving spouse to remain at his/her job and hire someone to perform the duties.

3. Beneficiaries. Should you pass away, the funds from your Life insurance policy become part of your estate if you don’t have designated beneficiaries. You want this money to be available immediately for the care of your child, not tied up in your estate. Therefore, it’s important for you to update your beneficiary designations soon after the adoption or birth of your child. Be sure to choose both a primary and contingent beneficiary.

In closing, insurance might not be as fun as baby shopping, but you can see how important it is to meet with your insurance agent and ensure that your Life insurance policy adequately meets your growing family’s needs and protects your child’s future financial well-being.