As a new parent, you have a lot of things on your mind – What colour do you paint the baby’s room? What daycare will you choose? What school do you want your child to attend when they are older? How can you save on groceries? A thought that doesn’t often cross a new parent’s mind is life insurance. However, now is the time to think about it. Life insurance is very important to have for your child and yourself.
First off, there are a couple of different types of life insurance to choose from.
Essentially, term life insurance is a life insurance plan that provides coverage at a fixed rate for a set period of time, known as the relative term. Once that term period expires, the rate of premiums can either be refinanced, or you can terminate the coverage. In the event of death, while insured during the term, the benefit would be paid out to the deceased’s beneficiary. Generally speaking, a term insurance policy is the least expensive form of substantial death benefit coverage.
Similar to term life insurance, permanent life insurance provides benefit coverage for the event of the insured’s passing. However, with permanent life insurance, there is no set term length. In addition, the rate of the premiums stays continuous until the policy ends due to death.
What you should think about as a new parent when considering life insurance:
Funerals are expensive
Most new parents starting out don’t necessarily have the extra funds to pay for a full funeral service if needed. According to the National Funeral Directors Association, the average cost of a 2021 funeral, including the viewing and burial in the U.S was $7,848. The amount adds up when you convert that into Canadian dollars. With life insurance, you don’t have to worry about paying for an unexpected funeral.
Insurance provides peace of mind
Funerals are difficult and emotional, so you don’t want to worry about the cost of the funeral upfront. Not only would you have to worry about funeral expenses, but you also would have to worry about any other debt and bills they owe. Life insurance gives your loved ones a piece of mind knowing everything is covered in the event of your death.
Both parents should be insured
People commonly assume that only one parent needs to be insured, but I’m here to tell you that is far from the case. We all will leave this planet someday, so having life insurance will ensure that the cost of your funeral will be covered and that someone else won’t be stuck with the bill.
In a way, it’s actually an investment!
Health issues can pop up unexpectedly, especially as we get older. If you have life insurance from a young age, you can save yourself money in the long run because you will get better rates as they increase. Every couple of years, you get the option to get more insurance. It’s easier to pass the health test when you’ve been insured for a while.
Don’t rely on your workplace insurance
Normally, the amount you get paid out from your workplace benefits doesn’t cover the cost. If you leave your job (which is likely to happen at some point in your working career), you’ll have to start a new policy with new rates. You’re more likely to save money by going with your own insurance company to lock in the lower rates and benefit from your investment long-term.
If one of the parents passes, will the other parent be able to afford childcare costs on their own?
This is a thought you never want to think about, but babies are expensive, and raising a child with one income is very challenging. The sooner you have a policy in place, the sooner you don’t have to worry about taking care of all the financial costs on your own.
Work with me, Darren Robinson, to find the best life insurance policy for your family.
These thoughts aside, it’s worth getting life insurance for your family. The monthly cost adds up to about two fast-food splurges a month. If you budget those late-night food runs and put them towards your life insurance instead, it will be like the money never left your wallet. To ensure you get a good rate on your life insurance, give me a call, and together let’s ensure your family is fully covered. I’ll walk you through the numerous insurance options to get started and will thoroughly explain to them as we go to make the process as simple as possible for you.