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Protecting Your Family With Life Insurance
Article 2 of 12 in Is Life Insurance Right For Me?
Family life insurance can help make sure your family is taken care of whether you are newly married, just had another addition to the family, or an established couple with children. Determining what types of life insurance to purchase and how much family life insurance to purchase all depends on your need and your budget.
TIP: When you shop for life insurance find out how much life insurance you and your family need! Your plan must fit your needs, so do not underestimate the importance of calculating them before you purchase life insurance for your family.
React to Triggering Events
A triggering event can serve as a reminder of the importance of life insurance. Triggering events can include the purchase of a home or car or the birth of a child, death of spouse, divorce, marriage and even loss of a job. When one of these things happens, you will need to adjust your life insurance needs both to fit your immediate situation and plan for the future fallout. If any of these events should take place, contact a life insurance agent and have a needs analysis review to determine if your life insurance coverage is adequate.
Life Insurance for Couples
If you are newly married, CONGRATULATIONS! Your next step is to buy life insurance right away! Apply for a life policy for you and your spouse as soon as you are married, if not before. Once you get married, you begin to rely emotionally on your spouse and financially on their contribution to your family. The sudden and unexpected removal of this support system can hurt your finances and cause a lot of additional stress. With life insurance benefits, you can help replace some of the financial contribution that will be missed while allowing yourself time to grieve without financial worries.
Marriage brings added future responsibilities as well. Planning for that new house mortgage or that baby in a year and purchasing a death benefit that will cover these items could be beneficial. Say you know your budget for your new home will be no more than $250,000. Purchasing life insurance to cover that now will save you from buying it in the next two years when you are two years older. The longer you put off buying life insurance, the more expensive your policy premiums will get, so you need to think of your immediate and long term plans including having children or buying a home in order to assess how much life insurance you will need to purchase.
TIP: Purchasing life insurance for your spouse and yourself with the thought in mind of covering future responsibilities could save you money in the long run!
Life Insurance for Parents
Family life insurance is not only important for newly wed couples, but for any family with children. Establishing a means for children to be cared for in the event of the death of one or both parents is crucial. You will need to sit down and calculate what it would take to raise your child(ren) if you were not there. Consider housing, food, clothing, education costs, music lessons, soccer, college, etc. This amount could be daunting, but you can probably find a low cost term life insurance policy to cover your children during the crucial years that they rely on you. Make sure you name a responsible person as your beneficiary or talk with an estate planning attorney about establishing a life trust for the proceeds.
Life Insurance for Other Members of Your Family
You should also consider how life insurance can benefit other members of your family, and purchase additional policies to fit your current and future needs.
- Life insurance for your spouse: An affordable term life insurance policy for your spouse could be purchased that adds a level of protection to your family. Life insurance for a spouse who is not working is just as important as coverage for an income producing spouse. Just consider the amount of work that a stay-at-home parent or spouse does on a daily basis. From cooking to cleaning, childcare to transportation, the duties are never ending - in some cases, it is more work than a full time job. If that individual were to die, who would carry out these duties for the family? And how much would the remaining partner have to pay for these services to continue? Consider all these duties and add the cost of hiring someone to replace the stay-at-home spouse. In addition, life insurance for the spouse can lighten the debt load your spouse will carry after your death and help give them some financial cushion.
- Life insurance for your children: Life insurance doesn't always have to represent death when it is purchased-it can also represent future planning and opportunities. When you buy a life insurance policy on a child, you are getting a policy they may keep for life at a very low premium. If they keep the policy into adulthood they not only keep the premium and avoid any future medical underwriting, but they also have a source of cash value to tap into for tax-free loans. This can help them when they want to go to college, get married and have children, even buy a home.
TIP: Purchasing life insurance for children provides a death benefit in the event of their untimely death, but it also can act as a resource for them as they grow into adults.
Buying individual policies for your spouse or children may or may not cost a little more but it can provide additional financial security and future planning to your family's life insurance portfolio. Ask an insurance agent today if getting life insurance for your spouse or children is a good idea for you.
The Right Life Insurance for Your Family
Determining the best type of life insurance for your family really depends on your goals, your needs and your budget. Most people purchase term life, layering the coverage to provide the best need during critical years (mortgage, young children, etc). Some even purchase term insurance and invest the difference of what they would have paid for a permanent life policy. This strategy (buy term and invest the rest) allows a couple to have reliable life insurance coverage for the family and a sizable nest egg at the end of the term, say 30 years. Low cost term insurance is offered by many different insurance companies. Make sure you are purchasing from a reputable insurance company by checking out the company's rating, and use an experienced agent if you need assistance. Getting an affordable term life insurance quote is easy. Click here to get a quote for your family life insurance today!
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