Each time your life goes through a major event is the perfect time to review your life insurance needs. As your family grows, your hopes for the future increase, as do the costs that go with those hopes and dreams. Life insurance after the first child, and each consecutive one, should include the needs of the child from the time it is born until she is ready to move out into the world. More importantly and most often overlooked, buying life insurance for your child is a benefit in many ways.
Buying life insurance for your newborn child is the cheapest way to provide him with insurance for the rest of his life. In addition to the obvious benefit of a cash value that builds for many years, the policy can also be set up to pay its own premiums. And buying life insurance when the child is young bypasses concerns about medical problems that could develop as the child matures, making life insurance more expensive of even difficult to get at all. Once you have a permanent life insurance in force, it cannot be canceled because of conditions that develop later.
Calculate the estimated cost of raising your child for the next 18 to 25 years. A policy for that amount, plus 5 percent for inflation, would mean that your child will be taken care of even if her dad cannot be there with her. Be sure to include the costs of health, clothing, housing, and education, and you will see how having such a policy can be a huge relief for your family later.
Life insurance is not for just one parent, even if only one parent works. If dad stays at home with the kids, his duties around the house have a dollar value that you would have to cost if he should pass away. Even though he may not be bringing in a direct income, he is offsetting the costs of the household simply by being there to care for the kids and other household duties. Childcare alone can easily add up to several hundred dollars a month.
The birth of your first child is not the only life event that needs to be insured. Buying a home, starting a new business, and moving to a new state are all reasons to get a life insurance policy in place to help your survivors carry on or move back to the family's home region. Any major investment or change in your family life is an indication that you need to review your life insurance coverage.