Once you get that positive pregnancy test, it doesn't take long for all of the planning to start. While it's fun to stock up on onesies and decorate the nursery, there so many serious topics to consider. Like, what are some things every new parent should know about life insurance? It can be overwhelming to think about, but understanding the basics of this type of coverage will help you make the best decision for your family.
When you're busy celebrating the new life you've created, thinking about tragic deaths definitely puts a damper on the mood. Even so, new parents should start looking into their options sooner rather than later. Scott Raymer, LUTCF, tells Romper that life insurance is essential because it protects your partner as well as your children. He says that aside from the extremely wealthy, "Typically, young parents do not have the financial resources to ensure their partners and children are able to remain in the home, and continue with their lifestyle should a parent die." Those are the things life insurance can help with.
That being said, there are also a few things to watch out for when you're shopping for the right policy. Scott Clark, MBA, tells Romper that because some life insurance policies have "investment aspects," life insurance can often be confused with a traditional stock market investment. He says, "Many agents will pitch [life] insurance as an investment first" and encourage clients to "put the cash value of the policy in the stock market." While that is certainly an option, Clark says that strategy doesn't "guarantee returns," whereas a life insurance policy that "is not indexed or stock based" will.
If you're not a life insurance guru, this information can leave your head spinning (which only adds to pregnancy nausea). Like any major purchase, there are caveats to every life insurance "rule" as well as ways to customize a policy to better suit your needs. But, in order to make informed decisions, you have to start by knowing the basics.