Most people dont think about life insurance until they are about to become parents  or are parents. Planning for the unexpected can be difficult . However,  it is your responsibility as a parent to make sure that your child’s  financial future is secured.

What is life insurance ?

It is an insurance that will pay your beneficiary , usually a family member , a specific amount of money in event of your death. This money can be used to replace your income, pay off debt, fund your child’s education or pay funeral expenses.

Who needs a life insurance ?

You need a this insurance  if you :

• are a single parent
• married
• married with a  child
• supporting an elderly parents

When should i get a life insurance ?

You should purchase it  when another person depends on you for financial support. Getting a life insurance should be a priority if you’re pregnant or have a newborn. It is also essential to get one for  you and your partner .

How do i choose a life insurance policy ?

The two common types  are term life insurance and whole life insurance. Factors that may determine which type of policy is best for you include the following :

• age
• income
• investment
• savings
• life situation

Term life insurance

This is the simplest and most affordable for most families with small children. You pay a yearly premium for a fixed term , usually 20 to 30 years. If you die within that term, your family will receive the whole amount of your coverage.

This type  is usually recommended by many financial professionals for everyone especially for families with small children  and limited income.

Whole life insurance

This is a permanent  plan that covers you for your lifetime rather than term.  You pay a fixed monthly premium until your death.  It also offers tax deferred cash value that grows as  your insurance company invests part of your premium.

You can withdraw or borrow from this money but you are usually heavily penalized. This type of life  insurance  is usually costly and more complex than term life insurance.

Whole life insurance is usually recommended for families with higher incomes who need a tax deferred savings plan.

How much coverage do i need ?

Most financial experts recommend 8 to 10 times your income for life insurance . If your annual income is  $50, 000 , you have to purchase $500,000 in coverage.

It is a good rule to purchase a $400,000  coverage if you are a stay home parent.  This might  cover expenses such as child care in event of your death.

Where should i purchase life insurance ?

Look for a reputable company with a strong financial strength rating. You also have to call your state insurance department to make sure the company  and agent are licensed in the state. You can also ask your employer if life insurance is offered as an employment benefit.