Parent’s Guide to Life Insurance
So you’re about to be or you’ve just become a new parent—congratulations! Whether this is your first or your fifth, you’re in for a lifetime rollercoaster ride that will bring you more satisfaction than anything else you’ll ever do.
But with parenthood comes responsibility and that means taking care of your family and providing for them if something should happen to you. Whether you’re the main financial support of your family or their caretaker and emotional support, you’ll want to make sure that losing you does not impact your loved ones financially. That means you need to get a life insurance policy.
How Much Coverage Do You Need?
If you take care of most of the financial needs of your family you will want to provide for them—but how much should you get? One way to start is to go over your budget and see how much your family spends for necessities like food, clothing, medical and dental each year. What about housing? Add that in, too, whether it’s a mortgage payment or rent. If you want your children to go to college, that’s also an expense you’ll need to cover. When you add up those figures and throw in the cost of burial, you’ll know how much coverage you need.
Are you a stay at home parent? You need Miami life insurance, too. Do you realize how much it would cost to hire someone to do your job? You have a tough, rewarding job and you are there because you want to be available for your spouse and your children. Getting life insurance will insure that their lives will be disrupted as little as possible and worry won’t be added to their grief.
Who Will Manage the Settlement?
When you buy a life insurance policy you’ll designate a beneficiary, a person to whom the insurance company issues the benefits you bought. You want to make sure that this person is one that you trust; it might be best to choose a close relative if you don’t have a legal spouse. What if you have a spouse but you both pass away at the same time? You will need a secondary beneficiary to distribute the settlement. Some people are inclined to name close friends or godparents, others specify in their will that a trust fund receive the money and it is doled out according to their wishes.
Above all, you want to make sure that there is no delay in your family getting the funds to take care of their needs should you no longer be there.
What Kind Do You Need?
Do you want Term or Perm life insurance? Term insurance covers you for a predetermined period of time while Perm is a lifetime policy. Term insurance is less expensive but Perm builds up equity that you can borrow against should you need to. There are benefits to both and depending on your individual needs you’ll want to examine both types carefully. Online quotes are a good way to compare the two types of policies.