Life insurance tips for new families

Becoming a parent is one of the most awesome and joyful milestones on the journey of life. And when you’ve got kiddos depending on you, you’d do everything possible to protect them, right? That’s where life insurance comes in. The following tips may help clarify life insurance for new parents to help give you and your growing family the financial security it deserves.

Get started sooner rather than later. The earlier you get life insurance, the more advantageous it may be for you and your family. That’s because many costs are based in part on your age. The sooner you act, the sooner you may be able to take advantage of a lower rate. Find out more about when to get life insurance.

Understand your options. It helps to know the main types of life insurance and their advantages for young parents. Term life insurance has a lower initial cost and remains in effect for a specific period at a set premium. Term life is often popular among young adults who want coverage to help pay off mortgages, loans or other debts should they pass away.

Whole life insurance may help give you protection for your whole life and has payments (aka premiums) that stay the same even if your health conditions change. Universal life insurance offers long-term coverage but has flexible premiums you may adjust as your circumstances change. While whole and universal life policies typically cost more than term life insurance, they offer longer-term protection and may build cash value you can access during the life of your policy.* Sometimes, people purchase term life insurance and convert to whole life insurance later. Read more about when to convert term to whole life insurance.

Know how much to get. Add up all your projected expenses, including debts, the mortgage or rent, monthly living expenses, childcare and future tuition costs when your kids get older. Then, subtract those expenses from the surviving breadwinner’s projected income and other financial assets (such as savings and investments). The difference between the two will give you a ballpark idea of how much life insurance to get. You can read more about how much life insurance to get or use our Life Insurance Calculator to streamline the process.

Make sure you’re both covered. If you and your significant other are the household breadwinners, both of you should seriously consider getting life insurance. Even if you’re a stay-at-home parent, it’s super smart to get insured so the costs of the at-home care you provide your family could be covered.

Name your beneficiary. Now that you have your coverage, you’ll have to name a beneficiary. What is a beneficiary? They’re the person (people or entities) receiving the death benefit should you pass away. Usually, a spouse or adult children are named primary beneficiaries, but reading more about choosing a beneficiary may be helpful to understand your options better.

To fine-tune your life insurance plans, talk to an American Family Insurance agent. Get the life insurance coverage you need, the peace of mind you deserve and special protection for the most important people in your life — your family.

This article is for informational purposes only and based on information that is widely available. This article does not afford, offer, or guarantee any coverage. We do not make any guarantees or promise any results based on this information.

Neither American Family Life Insurance Company nor its agents are authorized to give legal or estate planning advice, and this article should not be construed as such advice. Customers should consult an attorney or estate planner for answers to legal and estate planning questions.

This is a brief description of coverage and is subject to policy and/or rider terms and conditions, which may vary by state. Fixed and guaranteed premiums are statements about the policy as determined at issue, and any changes made to a policy may affect the premium and are subject to our underwriting rules. The words lifetime, lifelong and permanent are subject to policy terms and conditions.

*Any loans taken from your life insurance policy will accrue interest. Any outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or from the cash value at the time of surrender. If the loan balance grows too large for the cash value to support it, the policy could terminate.

Policy Forms: ICC18-33 (10), ICC18-33 (15), ICC18-34 (20), ICC18-35 (30), L-33 (10)(ND), L-33 (15)(ND), L-34 (20)(ND), L-35 (30)(ND), L-33 (10)(SD), L-33 (15)(SD), L-34 (20)(SD), L-35 (30)(SD), ICC18-36 (10), ICC18-36 (15), ICC18-36 (20), ICC18-36 (30), L-36 (10)(ND), L-36 (15)(ND), L-36 (20)(ND), L-36 (30)(ND), L-36 (10)(SD), L-36 (15)(SD), L-36 (20)(SD), L-36 (30)(SD), ICC17-225 WL, L-225 (ND) WL, L-225 WL, ICC17-227 WL, L-227 (ND) WL, L-227 WL