Becoming a new parent is an exciting, challenging, and somewhat overwhelming experience. When your child is born, you are suddenly responsible for a whole new little person. Instantly, your top priority becomes caring for and protecting your child.

Life insurance plays an important role in protecting your baby boy or girl. It is a way to ensure financial support should something unexpected happen to you. For first time buyers, finding the right life insurance coverage can be a daunting process. Our experienced agents are happy to help.

Why Do New Parents Need Life Insurance?

In becoming a parent, you become responsible not only for yourself, but also for the little person who is relying on you for survival. The cost of raising a child to adulthood, for food, shelter, and childcare alone, amounts to hundreds of thousands of dollars. This does not include the costs of higher education. Life insurance can help protect your child’s future financial needs in case you are no longer there to provide for them.

What Type of Life Insurance Is Best for Your Family?

The two main types of life insurance are term life insurance and permanent life insurance.

Term Life Insurance

This is usually the least expensive option. It provides life insurance coverage for a specific term, typically 10, 20, or 30 years. Benefits of this type of policy include the following:

• Policyholders can choose the length of coverage.
• Term is more affordable than permanent life insurance and may be a good choice for new parents on a budget.
• It may be the best option if you have a specific financial goal in mind, such as funding your child’s higher education or paying off your mortgage.

Permanent Life Insurance

Permanent life insurance costs more than term life insurance, but it also offers important benefits. Your coverage lasts a lifetime – it does not expire at the end of a designated term. Your beneficiaries will receive death benefits, regardless of when you die. It also serves as an investment vehicle. Permanent life insurance builds cash value over time, and you can borrow against it.

How Much Life Insurance Should You Buy?

Generally, life insurance can provide death benefits of from $100,000 to $1 million or more. How much life insurance you need will depend on your financial situation and your goals. As a starting point, assess the financial support your family would need if you were no longer there. Factor in:

• Expenses that would need to be paid immediately after your passing: This may include debt obligations, and funeral and burial expenses.
• Money your family would need to maintain their current lifestyle: Calculate this amount by adding up your annual income, savings, retirement savings, and investments. Include future financial expenses, such as your child’s college education.
• How much your partner earns: If you are raising your child with a spouse or a partner, subtract his or her income, minus income taxes, from the total life insurance amount.

For a rough estimate of how much life insurance to buy, multiply your annual income by 10.