Now, you are suddenly responsible for another person until they turn 18 — and for most parents even longer. One of the most important decisions that new parents will make during this time is deciding on a life insurance plan. However, life insurance for new parents can get complicated as you have just entered a new phase of your life and it can be difficult to envision the future. If you are a new parent looking for the best life insurance plan possible, then keep reading to find out the 3 most important things you need to know before settling on a policy for your new family.
Start With the Cost of Raising a Child
The first step for securing life insurance for new parents is to budget how much it costs to raise your child.
It can be difficult to imagine the total cost of raising a child. After all, how could you put a price tag on your little one? Well, when it comes to choosing an insurance plan for your family, you will have to do exactly that.
The average cost to raise a child in the US to the age of 18 is around $250,000. With the cost of raising a child so high, you need to consider what your spouse will need should they find themselves raising the child without your added income. For most couples, it would be difficult for one partner to raise a child on a lone salary, much less while living as a working single parent. That’s why it is important to get life insurance as a new parent — so you can live with peace of mind that your family is financially secure no matter what happens.
With the right life insurance for new parents you’ll pay a monthly premium, and your insurance company will pay out a death benefit to your family to help them cover expenses while you’re no longer around. To get the best plan possible, you’ll need to make some difficult calculations. Not only will you need to plan for the total cost of raising a child, but you will also need to plan for higher education costs.
Make Sure to Plan for College
Life insurance for new parents should factor in your child’s higher education.
Raising a child can get expensive, especially when you start discussing higher education. The cost for kids to pursue college is rising year over year and is often one of the biggest investments a parent makes in their child’s future. In general, the cost of college ranges anywhere from $23,000 for yearly in-state tuition to over $50,000 per year for out-of-state or private tuition. That means that for a 4 year college education, the total cost can be anywhere from $100,000 to $200,000 from dorm room to diploma.
This is a major cost that you need to factor in when searching for the best life insurance for new parents. Should your child want to pursue higher education, you want to purchase a plan that can secure tuition funds no matter what the future brings.
Life Insurance for New Parents is Affordable With the Right Plan
Make sure that your insurance policy works for your current budget and your family’s future.
Just reading about all of the different expenses associated with being a parent can get overwhelming. However, life insurance doesn’t have to overwhelm your bank account. For new parents, it is relatively easy to secure a low rate life insurance rate. In fact, the longer you wait to secure life insurance as a parent, the higher the cost of your monthly premium. For new parents in their 20s or 30s, it is possible to get a 30 year, $500,000 term life insurance policy anywhere from $30 to $40 per month. Considering the peace of mind associated with securing life insurance for new parents, many feel that a term life insurance plan is well worth it.
And there you have it! The 3 most important things you need to know before deciding on a life insurance policy as a new parent. Now that you’ve considered the major expenses, like the cost to raise a child and college related expenses, you can secure a low rate that will help protect your family in the event of your passing. Though it isn’t the most fun subject to consider, you can find comfort in knowing that your family is protected no matter what.
