Tips for Purchasing Life Insurance for Young Parents

Having children is often the primary catalyst that propels consumers into purchasing life insurance for the very first time in their lives. However, unlike established families who have had their policies in place for years, there are some special considerations for young parents.

Cover Both Spouses

One of the most common mistakes that young families make when purchasing life insurance is failing to cover both spouses. Even if one of the parents stays home to take care of a small child or children, the other spouse will be left to shoulder all of the burdens of the household in the event of his or her spouse’s death. This means that stay-home parents need life insurance, too. Think of it this way: the surviving parent would likely need to pay for daycare, cleaning services and other things in order to compensate for the responsibilities of the stay-home spouse.

Consider Child Care Costs

In the event that both parents are working – or even if one parent stays home – it is absolutely crucial to figure in the amount that childcare would cost when purchasing life insurance because this will have an impact on the size of the policy purchased. Childcare costs are often highest for children under five years of age because they do not yet go to school full time. Young parents need to figure these costs very carefully and make sure that their life insurance policies cover these costs completely for at least one or two years’ time.

Purchase Policies for Children

When purchasing life insurance, young families should also consider the benefits of purchasing policies for their children – even newborn babies. Policies for very young, healthy children are incredibly affordable and can build cash value over time. This way, the policy that parents purchase for their children can be borrowed against in the future to help pay for college or even to provide a savings nest-egg when the children venture out into the world on their own for the first time.

Whole vs. Term Insurance

Money is often very tight for new parents because, let’s face it, children are expensive. Whole life insurance pays a handsome death benefit and can be borrowed against, but it is much more expensive than its term life counterpart. When purchasing life insurance, young parents should consider the amount of money they can afford to spend per month. After all, it is better to have some life insurance in place than none at all, and a term policy can be incredibly affordable in this regard. It is always possible to upgrade to a whole life policy in the future, too.

Stay in Good Health

Young parents are often very healthy primarily due to their age. However, in order to make sure that life insurance costs stay low, these individuals need to continually monitor their health. Quitting smoking, keeping an eye on cholesterol, having regular physical examinations and more can all have a huge impact on anyone’s health. The healthier the parents are, the more coverage they can purchase for the same amount of money.

When it comes to purchasing life insurance, healthy young parents have it made. They have access to inexpensive policies for both themselves and their children and can help to build savings for their kids long before they are ever out of diapers.