As a parent, you would do anything to protect your children. However, no one has a crystal ball — what will happen to your little ones if the unexpected takes you out of the picture prematurely?
Life insurance lets you provide your family with financial protection that it would take a lifetime to save. It keeps your mind from whispering, “what if” at 3 a.m. Here’s what moms need to know about this powerful planning tool and how they can get started protecting their loved ones.
1. You Shouldn’t Put Off the Purchase
When insurance companies write a life policy, they use actuarial tables to determine your chances of surviving until your next birthday. Like it or not, you can’t stop the aging process. With every passing year, any coverage option will increase in expense.
Does this seem unfair, considering most young parents have little in their coffers until they hit their 30s or 40s? Perhaps, but don’t let that dissuade you from talking to agents from various companies to discover all your options. Locking in a lower rate when young can save you thousands over the life of your policy.
Will one of your folks pay for the price of your premium for a year, perhaps as a shower present? Grandparents can spoil your infant with practical gifts, too, and if the unexpected does occur, they’ll benefit if they decide to take over child-rearing responsibility.
2. You Can Find a Price to Fit Your Budget
If your first price check includes only whole life policies, you might mistakenly assume that life insurance is out of your budget. Please don’t throw in the towel so quickly. Multiple factors influence how much you pay, including your health, lifestyle and type of policy selected. Many term policies have lower monthly rates if underwriters expect you to survive past the coverage period.
You can also decrease costs by kicking the butts. Your health exam can catch you in a lie with considerable accuracy — don’t fib on your application. If you do, your beneficiaries might not receive a payout if you die. However, for each year that you remain smoke-free, your rates can decrease.
Other measures you can take to decrease costs include shedding excess pounds. While you can’t do much to change your health status if you have a heart defect or Type 1 diabetes, you can refrain from activities like parachuting that can drive up your rates considerably.
3. You Shouldn’t Name (Only) Your Children as Beneficiaries
You want your coverage to protect your children, so it’s only natural to pencil them in as primary. Think twice before doing so if you want them to avoid hardship and hassles after you die.
Most states have laws prohibiting the distribution of funds to minors until they reach the age of majority. If you die before your child turns 18, the courts will appoint a legal guardian. These individuals can pay some costs from the proceeds, but they can only do so within strict guidelines. Your child could endure considerable economic hardship before they reach the magic birthday.
Plus, many parents invest in life insurance as a method for financing higher education. You want your darling to focus on their studies during their junior and senior year of high school, not stress how they’ll pay their coming tuition.
4. You Can Use It to Plan for Your Future
Some policies accumulate a cash value that you can borrow against to do whatever you like. You’ll pay a considerably lower interest rate than credit cards or personal lines of credit. Many parents double-dip by using their insurance as both protection and a college-savings vehicle. Your children won’t start life suffocating under student loan debt if you can borrow against your policy and cover the costs.
What if your children don’t go to school? Wouldn’t you like to know the “bank” would almost always say “yes” to a loan to build a new deck or spend a month backpacking through Europe? A whole life policy gives you that borrowing flexibility.
5. You Don’t Want Your Children to Go Without Coverage
Finally, while you don’t want to dwell on the negative, life isn’t pretty for the economically disadvantaged in America. Because the nation lacks the vibrant social safety net of other developed countries, not having money means going without basics like health care, food and housing.
Most parents would rather die than let their children go hungry, and they don’t want to leave their little ones to decide between needed insulin and a meal. You can often obtain term coverage for the price of one mid-range casual restaurant meal per month. Isn’t that a sacrifice worth making to spare your family from poverty through no fault of their doing?
Every Mom Needs in on This Vital Life Insurance Savvy
As a mom, you must make wise decisions to protect those you love most. Arm yourself with this life insurance knowledge and protect your family with the right coverage today.