Best life insurance for new parents

Being a first-time parent can be both exciting and terrifying. Not only does everything in your life change in an instant, but you now have to protect another life. Planning for the future is one of the most responsible actions you can take as a new parent. Even if it is a difficult conversation to have, you should consider how to best care for your child if one or both of you die unexpectedly. Life insurance is an excellent way to ensure your child's financial security in the future, but determining which insurance to purchase can be difficult. This guide will give you a quick rundown of the best life insurance for new parents.

What type of life insurance is recommended for new parents?

Life insurance exists to protect your loved ones' livelihoods in the event of your untimely or unexpected death. In other words, life insurance helps to ensure that your spouse or dependents can maintain the same standard of living they had while you were alive. Although you should calculate how much coverage you need based on your specific living situation, the payout is generally intended to cover anything from your mortgage payments to future education expenses for your child. However, life insurance can also cover the following:

• Regular expenses
• Dependent care
• Funeral costs
• Unresolved debt

In most cases, the younger and healthier you are, the less expensive your life insurance will be — which is why most experts advise you to purchase life insurance as soon as you decide to start a family. When deciding on life insurance policies and coverage amounts, consider how heavily your daily expenses rely on your salary, any current or future debt that your spouse would be solely responsible for repaying, and long-term expenses for your child, such as college tuition.

Assume you have decided to stay at home with the newborn and rely solely on your spouse's income. How would you cover your daily expenses if they died unexpectedly? Would you be able to afford childcare if you had to go back to work? These factors will influence the type of policy you require as well as the policy's value.

Types of life insurance for new parents

Term life insurance

There are two types of life insurance policies: term life and permanent life. Term life insurance is coverage that lasts for a set period of time and pays a death benefit to the named insured if he or she dies during that period. Term insurance is popular among new parents because it can be purchased for a set number of years (usually up to 30) to cover the time it takes to reach certain milestones, such as paying off a mortgage or graduating a child from high school.

Term life insurance is also typically less expensive than permanent insurance, and the premium does not increase as the term lengthens. The disadvantage is that once the term expires, you will no longer have life insurance, and renewing the term can be expensive. There are several situations in which term life insurance policies may be advantageous to new parents.

When term life insurance is advised:

• When a household relies on a single income, new parents may be able to obtain more coverage at a lower cost.
• If you are younger, you will most likely invest in your retirement during your working years, so once your policy has expired, you will not need insurance.

Permanent life insurance

Permanent life insurance coverage that continues in effect until the name insured dies, regardless of age. Permanent life insurance comes in a variety of forms, including universal life (which can include market-influenced variable values), final expense life (which only covers burial expenses), and whole life insurance. Aside from the death benefit, a whole life policy can accumulate cash value through premium payments, which can be withdrawn or loaned to the insured. Furthermore, once you purchase a policy, your rate is locked in for life. However, because this policy almost always pays out, it is usually more expensive.

When whole life is recommended:

• If you believe you will require life insurance for a period of time that exceeds a specified term, it is best to lock in your premium rate before you get older or develop any health conditions that may make your premium unaffordable.
• Permanent life insurance may be a good low-risk investment option if you have the income and are interested in a more complex policy that provides additional benefits, such as cash value.

Best life insurance for new parents

When you are ready to purchase a policy, it is critical that you select the right company. While getting a life insurance quote for new parents can be a great starting point for comparison, other factors to consider include customer reviews, policies offered, and consumer ratings, which can help you determine which are the best life insurance companies. On the basis of these considerations, here are a few national providers to consider:

MetLife

MetLife, which controls the majority of the life insurance market, is a well-known and trusted household name. MetLife is used by many employers, so you may be able to purchase a policy through your employer. MetLife also has an excellent mobile app for making premium payments and reviewing policies, which is ideal for parents on the go. It also received an A+ (Superior) rating from AM Best.

State Farm

Despite the fact that State Farm is best known for its dependable auto and homeowner's insurance, State Farm's life insurance has an overall positive consumer rating, receiving 808 out of 1,000 points from J.D. Power in 2019. There are numerous types of life insurance policies available, and getting a quote online is simple. However, if you prefer to sit down and speak with a professional, there are State Farm offices all over the country where you can discuss your options. In addition, if you are already a customer, you may be eligible for new discounts on your other insurance policies, which is ideal for new parents on a budget.

Guardian

Because of its convenient online approach to purchasing coverage, Guardian may offer the best life insurance policy for busy new parents. You'll find calculators and other resources on the website to help you learn about the various policies available. Furthermore, it is simple to obtain a comprehensive quote for your specific life stage. Guardian has also received very positive customer feedback and an A++ (Superior) rating from AM Best in 2020.

Why life insurance matters for new families

When a child is born, life can become chaotic, and locating the best life insurance for parents is one of those tasks that you may never complete if you do not begin the process as soon as possible. Unfortunately, tragedies can strike without warning, so regardless of the type of coverage you require, new parents should consider purchasing a policy as soon as possible. After you purchase your policies, you may have more peace of mind knowing that you took the necessary steps to protect your family's financial future.