Life insurance may seem like a far off concern, something you need to worry about as you get older and are planning for when you are no longer around.
However, life insurance provides a source of income in case something were to happen to you at any point in your life. If you are newly married, you have young children, or you are thinking of having children or buying your first home, the ideal time to start thinking about life insurance is right now.
But I’m Too Young for Life Insurance
Term life insurance policies are ideal for young families. A term life insurance policy provides you with coverage for the time stated, from 1 to 30 years.[i] Term policies are often the most cost-effective option for younger individuals.
Many families no longer require a life insurance payout once they are older. By that time, they have saved up extra funds to help pay their way through retirement, and their children are self-sufficient adults.
How Much Coverage Do I Really Need?
Life insurance is there to help provide for your family if something were to happen to you. Deciding on the right amount of coverage in your particular case depends entirely on your family’s unique financial needs and goals.
Do you want to help cover daily expenses for your spouse and your children? Or are you also looking to help pay off the mortgage? The amount of savings you already have set aside could also greatly impact the amount of coverage you would want to have.
Is your spouse a stay-at-home parent? Don’t forget to secure coverage to account for your spouse as a childcare provider, as well, as childcare costs can add up quickly.
There are plenty of life insurance plans available. Do your research to find the right plan to meet your needs. You can begin by inquiring at your place of employment. Some companies offer group life insurance plans that you can buy into. Double check the coverage that they provide and the steps you would need to take if you stopped working for your employer.
Young couples in good health can find relatively low rates for their insurance plans. However, you won’t necessarily want to purchase the most affordable life insurance coverage you find. Consider the insurer’s ratings from agencies such as Standard and Poor’s and A.M. Best. What seems like a bargain at first may end up costing you in the end.
Talking about life insurance with your spouse can be uncomfortable. However, having the peace of mind of knowing that your family will be taken care of in case of an accident is well worth it.