Thursday, August 5, 2021

Five Life Insurance Tips For New Parents

The week after I married, my father sat me down and explained the importance of having a life insurance policy. I didn't think much of it until years later when we started a family of our own. I wanted my children to have security in case something happened to us, so after a little shopping around, we found a policy that met our needs. 

Today the folks from Fabric are on the blog to explain the benefits of life insurance policies. I hope you will consider getting one if you haven't already.

5 Life Insurance Tips for New Parents

As a new parent, you want to protect your children from anything — life insurance is one day to do so.

Congratulations, you are now a parent! It can be such a rewarding job, but it can also become quite stressful. From changing diapers in the middle of the night to worrying about their college education, there is a lot in store as a brand new parent. Even though your child is a baby and you don’t want to think about the possibility of using life insurance if you were to die, it’s something you must consider. Purchasing life insurance for you and your family can protect all of you if you were to pass away unexpectedly. You never know what the future might hold, and you should be taking every opportunity to protect your child and their future. Take a look at these life insurance tips to ensure you make the right choice in your coverage.

5 Life Insurance Tips for New Parents and Their Families

  1. Understand the Basics of Life Insurance

People can give you all the life insurance tips they want, but it won’t help anything if you don’t understand the basics. Life insurance is a financial safety net that can offer a death benefit to the beneficiaries of a policy. Depending on the type of insurance, a policy can build up cash value, assist your family with debts, and more. There are two main categories of life insurance, whole life insurance, and term life insurance.

Whole life insurance: Whole life insurance is a type of insurance that a person has for the rest of their life once purchased, as long as they continue to pay the premium. It can also accumulate a cash value that the policyholder can use while still alive or invest the money. 

Term life insurance: Term life insurance is only offered for a set period, usually between 5-30 years. After the policy expires, the policyholder can renew the plan, purchase a whole life insurance policy, or not buy any life insurance. There is no cash value, which makes this type of insurance much more affordable. 

  1. Don’t Rely on Your Employer Coverage

In most cases, your employer can offer you some type of life insurance coverage. While that is a great benefit, life insurance coverage is not one-size-fits-all. What plan the company offers will not suit every single employee, so you should consider other options. Even if the benefits at your job are excellent, they will only be amazing until you leave the company. The life insurance plan is tied to your employment and will end once you leave the position. 

If you decide to stick with your employer’s coverage, keep in mind that it usually only covers one to two times your annual salary. It’s recommended that your life insurance coverage is around four times your yearly salary, so you would only be receiving half of the coverage you need. It’s better to take your life insurance into your own hands and find the most suitable plan for you and your family’s needs.

  1. Both Parents Need Life Insurance

It’s common for people to believe that only the family’s breadwinner needs life insurance, but that is not the case. Stay-at-home parents need life insurance just as much as the one financially providing for the family. For example, if the caretaker were to pass away, the family needs funds to hire extra help. The payout can be used to hire an additional caretaker or nanny for the children to ensure that the kids are still receiving the attention they need and deserve.

  1. Buy a Policy Early

Purchasing your life insurance policy as early as possible will make it easier to approve and will most likely give you a more affordable rate. The cost of life insurance is determined by factors such as your age, health, gender, career, and more. There is usually a medical exam that must take place to assess your risk of death, which is how they determine your premium. When you are younger, you are usually healthier than you would be later in life. You can receive the same amount of coverage for a different premium price if you purchased your policy down the road, so it only makes sense to buy the coverage as soon as you can.

  1. Determine the Amount You Need

The amount of life insurance every family needs will vary, so you must take careful consideration. Since you are a new parent, it can be challenging to think about your children heading off to college, but that’s an expense you should still think about now. Your life insurance payout could be used to fund your child’s education. The payout could also be used to pay off your debts that usually include a mortgage or student loans so that your family is not left with this burden. Also, consider the bills or other expenses you would want to take care of for your family in the event of a tragedy.

As a new parent, you must think about the grand scheme of your child’s life. Unfortunately, you can’t predict the future, and you never know when you will pass away. Life insurance is a way for you and your significant other to make sure that your children are cared for if anything happens. Fabric makes it easier for you to organize your finances, receive life insurance tips and quotes, and write your will. Learn more about Fabric and prepare for all the things that you can’t predict.

**Images courtesy of Pexels.



  1. This is very good information for older people.

  2. Such great advice!
    We're at the opposite end now. Our policies have jumped and jumped in price through the years and, recently have gotten so high, they are prohibitive. Fortunately, we live in Canada, where heath care is a right rather than a commodity, so we're fine without any insurance. Though after so many years of having full coverage, I'm feeling a bit . . . naked right now.

    1. Yes, that IS scary---but lucky you to have full health benefits---wish the U.S. was more like that!!

  3. Great awareness piece, Marcia. Thanks for sharing this. It's not something young parents think of.

    1. We didn't at first, either, but now we certainly know the importance of it!



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