Discovering that you are going to become a parent for the first time is exciting and a bit intimidating. There is a lot to do when getting ready to welcome a child into your family. In addition to preparing the nursery and purchasing supplies, you and your partner need to consider your financial preparation as well.
Most people who don't have children do not carry a life insurance policy. A child is completely dependent on his or her parents for financial support, so investing in a quality life insurance policy should be an essential preparatory step for all expectant parents.
Here are three considerations you should discuss to help find the best policy for your family.
1. Consider your income.
When shopping for a life insurance policy, it's important to consider both your current income and your expected income in the future. Most life insurance policies provide coverage for a set period of time.
Your financial situation could fluctuate drastically over the life of your policy. You want to ensure that should you die unexpectedly, your partner and child will not be left in a financial hole. Purchase enough life insurance coverage to support your expected income, and you can avoid leaving your loved ones in a financial lurch.
2. Consider your debts.
Debt can also play an important role in determining how much life insurance coverage you will need.
A child introduces new debts into your financial future. You will need to plan for the expenses of rearing a child, including supplies, medical care, and educational expenses. These debts, combined with your existing and anticipated household debts, will help you determine how much money your surviving partner will be required to pay after your death.
A life insurance policy that provides a payout large enough to cover your anticipated debts will ensure that your child doesn't have to forego college due to a lack of funds.
3. Consider future children.
As you purchase life insurance in preparation for the birth of your first child, you need to discuss your future plans with your partner. The number of children that you want to add to your family can influence your amount of debt and monthly expenses over time.
Since a life insurance policy provides coverage for a number of years, you will need to plan for the future when investing in a life insurance policy now. Take into account the costs associated with any future children to ensure that they will enjoy the benefits of your life insurance coverage as well.
Contact a life insurance agency, such as Jack Brier, to get started on finding a policy for your family today.