Why life insurance is important when starting a family
[social_share]Life insurance is a very important consideration when starting a family.
Starting a family is usually the point where most people begin to assume real responsibilities. When people get married or start a relationship, there are some dependencies, but both parties can usually get jobs and they are both able to earn money if necessary. This is not the case with young children.
As well as the needs of young children, there are also the financial needs of the partner who stays with them to be considered. It may be necessary to keep at home with young children, and life insurance can make that possible. Life insurance also ensures there’s enough money for education and there’s not the pressure to start working at the youngest age legally acceptable, which can be a significant pressure on a young person who has grown up in a home with limited resources.
For these reasons, life insurance for couples with children is a true necessity, although it tends to be only considered either after several years have passed or after a health scare. However, life insurance should be part of the planning process before the first child is born.
Unfortunately, it’s also reasonably common for a couple with no children to either have a small life insurance policy or to have none at all. A young couple with no children who are both working do have some need for life insurance, particularly if there are no savings, but the need is far less than when there are children involved.
Life insurance is quite daunting for many people when they purchase it for the first time. This is because life insurance, like writing a will, can be an admission of mortality. Life insurance in these cases should simply be seen as a financial product purchased for the good of the child, like a college savings plan.
When considering life insurance, a number of decisions need to be made. Firstly there is the term, which should ideally cover the time which is intended for the child, and any subsequent children, to stay in education. Then there’s the payout, which should provide a comfortable if not lavish income for the family. Finally, there is the decision whether the policy purchased should cover disability as well as death.
