Becoming a parent for the first time is a happy but turbulent time –the change from having only yourself to look after to having dependents is one of life’s greatest challenges. As well as the practicalities of looking after children there are also important financial implications for your new family – and especially- what would happen in the event of the death of either yourself or your partner? Life Insurance should be a priority for both parents since childcare costs, should the stay at home mom or dad die, could be astronomical.
First Time Parents are Getting Older
Couples who delay having children into their late thirties or even forties will have dependent children in their sixties. According to the U.S. Census Bureau, last year over six percent of males with children aged eighteen or under were over 55.This is a jump up from 3.6% in 2000 and it’s a trend which seems set to increase.
If you delay having children then the sooner you take out a life insurance policy the better, since the younger you are when you apply the better the terms which can be negotiated. Life insurance cover will also help protect children with older parents from having to pay out on medical care for them later on.
Which Types of Life Insurance Policies Will Suit me?
Total Face Value of Individual Life Policies Purchased in U.S.
Many first time parents opt to take out ‘term’ insurance. This is where you are covered for a fixed number of years – say, 25 years – until children have finished college. If you die before the policy runs out, then your spouse will receive a lump sum. This type of life insurance is one of the least expensive, and if you do not die within the term you will receive no payout.
Another option would be to take out life insurance in order to pay off the balance of your mortgage should one of you die (sometimes known as credit life insurance) – this would at least enable you to keep the family home, should the unthinkable happen.
Sources
U.S. Census Bureau
Consumer Reports.org
photo credit: goat_girl_photos
