If you're thinking of starting a family, you will suddenly be faced with a load of responsibilities that you probably did not have before. One of …
If you’re thinking of starting a family, you will suddenly be faced with a load of responsibilities that you probably did not have before. One of these, which should not be ignored, is that of taking out a suitable life insurance policy. Why you need this in the first place is to ensure that your spouse can carry on financially without you, in case you pass away. How will he/she pay the expenses of the new baby? If you are the main earner, then your death will hit your household even more severely. This is why new parents must consider life insurance.
Here is a list of questions and queries that you should make sure you have answers to before deciding on any life insurance policy:
• How much life insurance do you need? You want to make sure you don’t have too less that won’t cover your expenses or that you don’t buy something that is more than you need. There are many online calculators that work out how much life insurance would be sufficient for your dependents in case of your death. When deciding how much coverage you would want, you need to consider what kind of standard of living you’d want your loved ones to have after you pass away.
• What type of policy do you need? Do you need it for a particular time period, say from when your baby is born till he/she graduates from college? There are two kinds of life insurance. Term life insurance is generally much cheaper than whole life and it is usually recommended for new parents. It lasts for a certain number of years. You may choose level term insurance if you want your premiums to remain the same throughout the term of your insurance or you may choose annual renewable term insurance that renews itself after the term is over – but the premiums increase.
Whole life insurance is comparatively more expensive than term life.
• What company should I buy life insurance from? Make sure the insurance company is reputable and well known.
• Carry out your own research so that you are aware of all your options.
Just before you start a family, this is a good time to get yourself insured. You have a lot more people depending on you now and hence the importance of making sure they’re okay is even more apparent.