The importance of life insurance compounds as your family grows. If you are considering having a baby or are pregnant, you are wise to think about life insurance.
Consider these fundamental questions to help guide your decision.
1. I am currently pregnant. Can I qualify for life insurance?
Yes! Securing life insurance during pregnancy is quite common. Don't delay - the sooner into your pregnancy you apply, the better. Commonly, your premiums (monthly payment) will not be higher. Even if you are charged more during pregnancy for health concerns, (i.e. gestational diabetes or high blood pressure) some coverage is better than none. Remember, you can always reapply for coverage after your pregnancy if your premiums are elevated.
2. Should I buy term or permanent life insurance?
Term = Coverage for a certain period of time (i.e. 10 yrs. or 20 yrs.)
Permanent = Lifelong coverage
Generally, young families will want to purchase term. While permanent insurance provides lifelong protection for your family, term insurance is more affordable and allows you the opportunity to reevaluate your insurance needs in the future.
3. How much does it cost?
Age and health are the two largest factors in determining life insurance premiums. Term insurance is very affordable. For example, a healthy, non-smoking 27-year-old female can expect to pay around $12 monthly for $500,000 of coverage for 10 years. That's just $0.40 per day!
4. How much life insurance should I get?
The general rule of thumb is to get at least 10 years of your annual salary in coverage. For example, if you earn $50,000 annually, you should get about $500,000 in coverage.
SAHMs (stay-at-home-moms) need coverage, too. Even if you don't bring in money to your family, your value is immense. In fact, salary.com estimates that a SAHM's work is valued at $118,905 annually (2014 figure).
Every family's financial situation is unique. For an in-depth evaluation of your life insurance needs, we recommend you use Life Happen's calculator, a nonprofit life insurance awareness organization.
For further information, check out this article from Life Happens.