That responsibility includes taking care of your family under all circumstances, so updating your insurance policies should be right at the top of your family planning list. Getting everything squared away before baby arrives will help to avoid any last-minute surprises.
This quick-start guide helps you to determine what kind and how much life insurance you will need in order to ensure that your family is financially protected against the unthinkable.
Deciding Between ‘Term’ and ‘Permanent’ Life Insurance
Life insurance does more than cover burial costs and end-of-life expenses associated with an insured’s death; it acts as a buoy for your family’s lifestyle so that it can preserve such essential line items as education, healthcare, housing and other general expenses.
The two main types of life insurance policies are “term” and “permanent.” Each has its own unique benefits and coverage areas. Choosing between life insurance types isn’t always straightforward:
Term life insurance is typically the most affordable because it offers protection for a specific length of time, often 10, 20 or even 30 years. Beneficiaries will receive disbursements if and when the insured passes away, provided that the death occurs during the course of the insured term.
This type of life insurance often works best for young physicians who want to provide for their children until fully grown in the event they die prematurely. While term life policies feature more affordable insurance premiums, they do not typically provide a life insurance solution for the individual who dies at an advanced age.
Permanent life insurance, also referred to as “whole” life insurance, covers the insured for the duration of their lifetime and stays in force as long as premiums are paid. It also carries several additional benefits compared to its term life counterpart. Such plans are often used in estate planning. In addition, permanent life insurance plan holders may withdraw funds from the cash value up to the amount of paid premiums without any tax consequence.
Updating Your Life Insurance Policy
Future mothers should apply for life insurance before pregnancy as life insurance companies may be reluctant to provide plans to them once baby is on board. If already carrying life insurance when pregnancy begins, families should update the beneficiaries and revise any will or trust to appropriately reflect changes.
Responsible Present, Secure Future
Life insurance is important for growing families. Having a policy in place ensures the ability to provide for a child in the event of the loss of one or both parents. There are many types of life insurance to suit many needs, and as your family grows those needs will change as well. For help with securing your family’s financial future, you may want to consider contacting a trusted insurance advisor.
By taking care of future financial plans now, you can be assured that your hard work and sacrifice will be felt for all your days to come, and your new baby’s first two words might just be a “thank you.”