Last year, there were over 4 million babies born across the United States, and by 2017 the birth rate is projected to reach 4.5 million, a rise of more than 12 percent. As a result, an increasing number of parents will face a host of important decisions that come with the responsibility of caring for a family, including how they will provide for their loved ones if something should happen to them.
New parents should evaluate their existing life insurance policies to determine whether they offer suitable types of protection at competitive rates, the appropriate amount of coverage and the correct beneficiary designations. Regularly reviewing this information can reduce the cost of life insurance for families. For instance, term life insurance rates can vary considerably over time and it may be worthwhile for parents to get new quotes for their current policies, as rates have declined steadily since 1996.
After assessing their additional insurance needs, parents can begin researching and comparison-shopping online or through an insurance representative. Those seeking information online can go to Insurance.com to get quotes, compare providers, learn about the different types of coverage available, and request an application to purchase a policy from a variety of providers.
Life insurance policies can vary significantly in exactly what is covered, and how much is covered. When reviewing their policies, parents should consider:
Designating a Beneficiary
New parents should update their beneficiary designations after the birth of a child, or the people who are named to receive the benefit of their life insurance policies. Beneficiaries should be chosen carefully, since changing the designation to another person later can be difficult. Both a primary and a contingent beneficiary should be named to ensure funds would be available immediately to the family, rather than flowing to the estate, which could result in delays and additional expenses.
In preparing for the birth of a new baby, parents may spend hours painting the nursery and searching for just the right name. Along with those activities, they should consider their life insurance needs as the due date approaches. Having children can be overwhelming at times, but knowing that their family is financially protected can bring parents peace of mind as they celebrate their new arrival.
*The VARDS [Variable Annuity and Research Data Service] Report, Marietta, GA as of 12/31/2001.
Please note that this description/explanation is intended only as a guideline.
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