A Quick Guide to Life Insurance for New Parents

A Quick Guide to Life Insurance for New Parents

Everything changes when you have your first child. You start thinking about different things, wanting to achieve different goals, and focusing on the future of the child. This is a time when things such as better job security and a suitable life insurance policy become very important all of a sudden. Everything is geared towards securing a better future for your child.

As a new parent, getting a life insurance policy is a step in the right direction. You are not doing it for yourself, but for your partner and the child you love so much. Fortunately, there are many ways to get sufficient life insurance coverage, even when you are on a tight budget. This quick guide will help you find the perfect life insurance as a new parent.

Term vs. Permanent

The first thing you want to understand about life insurance policies is the two major types: term life insurance and permanent life insurance. As the name suggests, term life insurance is attached to a predetermined term, meaning the policy will remain in force for a period of time.

Term life insurance tends to be more affordable. The timeframe itself can be adjusted to as long as 15 years; some insurance companies are starting to offer longer terms too. This means you can use term life insurance to protect you during certain periods like raising your child or repaying your mortgage.

Permanent life insurance, on the other hand, is, well, permanent. You pay a higher premium for this type of insurance, but you don’t have to worry about renewing the policy. Permanent life insurance is particularly useful when you have a child that will be permanently dependent on you.

You can use permanent life insurance to plan your estate better. The higher insurance premium can be considered an investment when you consider the return that your loved ones will receive in the event of your death.

Balancing Your Policy

Here’s something that not all first time life insurance buyers understand: you can convert your term life insurance into permanent life insurance. Most term life insurance policies can be converted, either in half or in full, into permanent life insurance, adding a bit of flexibility to the mix.

This means you can start with term life insurance and convert that policy – either a part of it or the whole policy – into permanent life insurance for better protection. If you are starting with a limited budget, this is an option worth exploring.

Ask your insurance provider about the possibility of converting term life insurance into permanent life insurance before making a purchase. While you are at it, don’t hesitate to negotiate a better quote for your life insurance too.

The Perfect Quote

That actually brings us to the next thing to understand about life insurance: you can fine-tune every aspect of it to better suit your needs. You can adjust the term of the insurance based on how much you can afford to pay in premiums.

The same is true for your insurance coverage. You don’t have to settle for the amount offered by the insurance company and can instead calculate the coverage amount you really need for maximum protection. The coverage amount will influence the premium you have to pay.

Lastly, you can ask for discounts and get special offers on your life insurance, just like you can with your health insurance. You can also take steps to lower your risk profile, which will result in a lower insurance premium as well.

With these details in mind, buying your first life insurance policy as a new parent is not going to be a complicated process. Start your search by getting quotes online today.