July 3, 2022
  • July 3, 2022

7 life insurance tips for new families

By on September 24, 2021 0

If you’ve just started a new family, making sure you have the right life insurance policy is one of the most important things you can do.

Unfortunately, sorting through all the details and understanding the different types of life insurance can be tricky. Here’s what you need to know about life insurance for new families.

1. Understand the different types

The most basic part of life insurance is understanding the different types of coverage available. The two main types of life insurance policies are whole life insurance and term life insurance.

Whole life insurance comes with a higher monthly premium, but it’s also a permanent form of coverage as long as you make payments. Reading a book or doing research can help you better understand the types of policies.

2. Consider all expenses

Before deciding on the amount of life insurance you need, consider all of the potential expenses. If something happens to you, your loved ones will have to pay monthly bills, including mortgage, electric, and auto payments. In addition to these expenses, you should also consider the costs associated with the death of a loved one and any unforeseen expenses that may arise.

3. Don’t make a minor your beneficiary

You might want to make one of your children your beneficiary, but it’s a bad idea if they’re still a minor. If you name a minor as the beneficiary, they will not be able to collect money from your life insurance policy until they are 18 or 21. The age of a minor to take control of property or finances through a life insurance policy depends on the state, but it is always at least 18.

4. Create a will

If you want to make sure your family is prepared if something happens to you, take a moment to write a will online. Drafting a will makes it easier for your loved ones to manage your death in a legal sense. If you’ve already designated who you want, what property to go to, and who you want to become legal guardians of your children to, there’s not much to worry about, legally speaking.

5. Talk to your insurance agent

Ultimately, there isn’t much you can know as a person looking to purchase life insurance. If you want to make sure you’re getting the best coverage for your family, you should talk to your insurance agent about your options. While whole life insurance coverage is the best for some people, term life insurance coverage may be a better solution for you, depending on your financial situation.

6. Consider several options

Remember, you always have options when it comes to life insurance, so your best bet is to explore all the possibilities. Don’t decide on a policy prematurely; take the time to compare the rates of different life insurance providers and find a policy that provides the coverage you need with the lowest monthly premium.

7. Make sure you have sufficient coverage

One of the biggest mistakes you can make when it comes to life insurance is not getting enough coverage. You pay for peace of mind with life insurance, and you can’t put a price on it. Don’t skimp on your policy to save on your monthly premium. Be sure to work with your insurance agent to get the right amount of coverage for your family.

Life insurance may seem complicated at first, but your agent can help you determine what is best for you. If you’re starting a new family and considering life insurance, follow these tips to make sure you’re getting the right coverage.

Michael started Your Money Geek to make personal finance fun. He has worked in personal finance for over 20 years, helping families lower taxes, increase income, and save for retirement. Michael is passionate about personal finances, side activities, and all things geeks.