Guest Post: An Introduction to Life Insurance for New Families

Liran Hirschkorn has over 12 years of experience in the life insurance industry. He is able to work with and pair clients with the best term life insurance companies in the market. He is excited that his second child is on the way – and hopes that posts like this one can help families be protected from the uncertainties of life.

It’s something no new parents (or any parents, for that matter) want to think about, but it’s unavoidable when you hold that bundle of pink wrinkles under your own roof. An immeasurable weight rests upon your shoulders when you realize that your child’s well-being is entirely dependent on what you can provide, and if something were to happen to you.

What it Covers

Put simply, life insurance will pay benefits for any death be it from natural causes, accident, disease, and injuries. Of course every policy and person is different so some areas might be excluded or modified (like if you died while rock climbing), and you can also apply different riders like an accidental death benefit rider which pays more should your death be caused by an accident. This can help to provide additional coverage in circumstances when your family would have no time to prepare.

Who it Covers

The policy will generally only cover yourself or whomever the policy is taken out on, but parents can take out child riders for a small fee which extends coverage to children past two weeks of age up to adulthood. The coverage in a child rider is usually only a fraction of the full coverage, and it is often in place to cover fees like burial costs should the worst happen.

How Much it Costs

This is where most people get it wrong. Life insurance isn’t some money laundering, estate saving, for the upper one percent only device that costs more than the average American makes in a year. Of course the types of previously mentioned policies are certainly available to those who want them, but in general life insurance is much more affordable than most people realize. For example, this is how the cost breaks down for a man of average health on two different term life insurance policies.

25 years old: $500k 25 year term = $26 per month; 30 year term = $30 per month

30 years old: $500k 25 year term = $28 per month; 30 year term = $32 per month

35 years old: $500k 25 year term = $34 per month; 30 year term = $37 per month

It’s also important to note that women have cheaper rates than men if everything else is equal – go moms! This amounts to be cheaper than any local cable and internet provider you’ll find…and if you know of a cheaper one, please let me know!

Some Friendly Advice

A lot of people are intimidated by life insurance because they’re ignorant about it, and that’s okay. I’m ignorant about my car engine which is why I have a mechanic I trust to work on it. I suggest finding an independent broker to work with in order to find the right policy for you. Independent brokers work with a variety of companies and can do the shopping around and negotiation for you, and they aren’t tied down or feel the need to cram you into a policy that isn’t the best fit just because they’re working for a particular company. If you’re confused, ask questions! That’s why brokers are there.

In the end, life insurance is there for you to sleep easier at night knowing that your family is protected should you not be able to provide for them. Many parents choose to go with term life insurance policies after their first child is born. These provide coverage for a designated amount of time rather than a whole life policy, so it can end after the kids are grown up and no longer requiring your support.

If you have any questions or concerns about life insurance I’d be happy to address them in the comments below, or you can contact me privately here.

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