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Life Insurance for New Parents

Life insurance is important for new families, both for the parents and the children. Parents need to be insured to make sure that their children will not be left without if one of the parents passes away, and for children the need for insurance is threefold. First, if the unthinkable should happen and a child dies unexpectedly, the cost of a child's funeral is not a subject that grieving parents want to face. Secondly, a whole life purchased while the child is young is inexpensive and will remain in effect for as long as the premiums are paid. Finally, giving the gift of a whole life policy to your children will give them a financial tool to draw on later in life, perhaps to buy a first home or to pay the cost of a nice wedding.

Insuring yourself is the first step. Your children depend on you for their every need, and if something should happen and you are taken out of the picture, it is vital that your children do not suffer financial hardships as well as emotional ones. For your primary life insurance, choose a whole or universal life policy that can provide cash coverage now and will offer you the ability to borrow against the policy later. If you need to add on a new room for your child in a few years, the accrued cash value of your whole life policy could be just the ticket to expand the home.

Insuring your children with a whole life policy is the cheapest way to provide them with coverage that will stay with them. Whole life policies bought for children have the lowest premiums of any life insurance, and once the policy is in force there is no danger of the coverage being denied later in life if an excluded condition develops.

As the child gets older, the accrued value of a whole life policy will grow, and by the time the child graduates college and is ready to settle down to begin a family, the value in the account could be borrowed against to use as a down payment on a home or some other family goal.

In addition to your life insurance policy, consider the need to provide for college tuition if you pass away. Picking up a term life insurance policy when the children are young can be the best solution, making sure that the tuition will be there when it is needed if you are not able to be there yourself.