Protecting Your Children with Life Insurance – Why Both Parents Should Get Cover
For a lot of people, having children is the biggest motivator to start thinking about life insurance. This is because for young, working couples, it tends to be the first time in their lives where somebody else is completely dependent on them for money. It can seem a little premature to start thinking about insuring against your death when it is just you, or just you and your partner, and you are basically free of debt or commitments, but as soon as your first son or daughter comes into the world this changes!
For many people, life insurance is one of the first financial changes they make when they discover they are expecting their first baby, and this is a prudent decision. While nobody likes to put a downer on a happy event like discovering they will be becoming a parent for the first time by talking about money, and worse, death, it is an important thing to address – should the worst happen to one or both partners, whole or universal life insurance will mean that there is money left behind to help take care of the kids, even enough to pay for things like a college education.
If you are expecting at the moment, or already have children but have not yet taken up a life insurance policy, it is important you make the right choices about the policies you invest in.
Balancing the Need for Insurance with What You Can Afford
The peace of mind insurance can bring to parents of young children, or people who are expecting their first baby, can be immense, and well worth paying insurance premiums to have. However, insurance is also another monthly outgoing when it can already be a stretch to pay for everything a young family needs, so it is important to many couples to get the cover they need while still staying within their budget. This leads many couples to consider only insuring one partner – the one who has the highest or only income, or the best career prospects.
Why Insuring Only One Parent is a Bad Way to Save Money on Life Insurance
The reason why many couples think insuring only one partner is a good idea, is that often only one partner is working full time when the kids are young. Because the majority, or all of their household income comes from one person, it stands to reason that only that person needs to be insured, as the rest of the family is effectively dependent on them.
Unfortunately, this doesn’t really work out well in practice. While one partner is working, the other is looking after the children. If the partner at home were to die, while the working partner would still have their job or business and therefore their income, they would be faced with all kinds of practical and financial problems without their partner at home looking after the kids. They may have to change jobs to allow more time at home, reduce their working hours, or pay for full time childcare. Given how much their circumstances would change, it is clear that a life insurance pay out would give them better options for coping with life as a working single parent. It may even allow them to take a period off from work to spend as a full time parent, which can be important as a family adjusts to the loss of a person and begins to find new ways to move forward together.
Shop Around for a Good Deal
There are different types of insurance policy available for people in Canada, for example whole or universal life insurance. If you want to save money, rather than excluding one parent from being insured, instead do your research about the best type of policy for your family, seek out competitive quotes, and shop around for a policy that will give both partners the coverage they need to ensure that the family will be provided for financially whatever may happen, at a price you can afford now.
As monthly outgoings go, when you get a well matched policy, you will find that it is well worth the amount of peace of mind it gives you to know your children will always be financially secure, even if you are no longer there to provide for them.
Insurance is very much an essential when you have children, so don’t try and make savings that can cause bigger problems in the long term by getting less cover than you need.