If you are a new or seasoned parent, here are a few practical life insurance tips that will keep your family protected.
As a parent, you want to ensure that your children are protected from anything and everything. You also want to lock in a future for them that leads them down the right path financially. From the recent high cost of living to fear of the unknown, you must set up a plan to protect your family. Setting up a life insurance policy is a surefire way to keep everyone safe, even after you pass away. Unfortunately, we can’t predict when we are going to die. Therefore, t’s vital to be prepared and buy a life insurance policy as soon as possible. If you are searching for the most suitable life insurance policy for your family, take a look at these life insurance tips for parents to ensure that you are purchasing the proper coverage.
5 Tips for Purchasing Life Insurance as a Parent
Purchase Cover as Soon as Possible
As a young parent, you may not be thinking far into the future, but it’s essential to do so. When purchasing life insurance as a parent, buying the coverage earlier can make the premium much more affordable. Underwriting is the process in which a life insurance carrier determines how much of a risk you are to them, defining the premium price you must pay. A large portion of the underwriting process has to do with a medical exam and your current health. Your health status is usually better when you are younger, making it a better chance to receive a lower rate. Your age is also another factor that will affect the price, meaning the younger you are, the lower the premium. You also never know what might happen, so buying the coverage as early as possible will leave you with no regrets if anything unexpected happens.
Understand the Types of Coverage
There is no one-size-fits-all when it comes to insurance, which can make it incredibly overwhelming. The two most common types of insurance are whole life insurance and term life insurance. Each policy can fit the needs of specific families, so it’s crucial to choose a plan based on your family. A whole life insurance policy is a permanent policy, meaning that it stays in effect for your entire life as long as you continue to pay the premiums. One of the perks of a whole life insurance policy is the cash value aspect. The cash value of a whole life insurance policy is part of the premium that gets put away and can be used by the policyholder.
A term life insurance policy is much more affordable because it does not have cash value. The period of a term life insurance policy can be anywhere from 5-40 years. Once the term expires, the policyholder can renew the plan, turn the plan into whole life insurance, or find an entirely new insurance policy. Because they are more straightforward and less expensive, term life insurance policies are usually the most popular for young individuals and families.
Speak to an Insurance Agent
It’s impossible to know every single detail about life insurance unless you are a professional. It’s vital to receive a professional’s opinion before purchasing a life insurance policy as a parent because it will protect your children. You need to make sure you buy the most appropriate insurance policy with the most suitable coverage. An independent insurance agent is an agent that does not work for a specific company. Instead, they are an unbiased resource that is paid out by the carriers. Because they work for various carriers, they can offer quotes from many different companies for you to compare and contrast.
Name a Beneficiary
The beneficiary would be the person who receives your payout if you were to pass away while your life insurance policy is in effect. In most cases, a spouse or adult child will be named the beneficiary. However, it’s important that if you have young children, do not name them the beneficiary because they may not be legally allowed to receive the money. You can even split it up to have multiple beneficiaries, but you still need to name a primary beneficiary. The primary beneficiary will be responsible for paying off any debts or paying for the funeral expenses.
Buy the Coverage You Can Afford
Most life insurance professionals recommend purchasing a plan that is ten times the amount of your annual salary. That may sound extreme, but it will leave your loved ones with enough money to pay your debts, funeral costs, any extra bills, and more. Some parents may believe that the more coverage, the better, but you have to be sure that you can afford the premium before deciding on a plan. If you can’t afford ten times your salary, some coverage is better than no coverage at all.
Purchasing life insurance as a parent can be one of the best ways to keep your children protected. It’s important to find coverage that is affordable and suitable for you and your family. With Fabric, you can receive term life insurance policy quotes in as little as ten minutes, allowing you to compare various plans at your fingertips. Download the app today to buy your life insurance policy quickly so that you can get back to spending quality time with your family.