Everything New Parents Need to Know About Life Insurance
Updated On Apr 22, 2021
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Addition of a child to the family changes one’s life in unexpected ways and new parents suddenly feel a sense of tremendous responsibility towards the tiny human who is completely dependent on them to live. One of the important responsibilities of a new parent is to buy life insurance for their child, to provide for their financial needs for present as well as for future.
Also Read:- Top Reasons To Buy A Child Insurance Plan
What Type of Life Insurance is Best for New Parents?
The primary aim of new parents is to secure the future of the child financially. Creating a strong financial cushion for the child is possible by investing in the right child insurance plan at the right time. There are a plethora of child insurance plans available in the market and first-time parents should choose them wisely based on their requirements and suitability. The best child insurance plans that promise them a secure future are:
- Aditya Birla Vision Star Child Plan
- Bharti AXA Life Child Advantage Plan
- Aegon Life Rising Star Child Insurance Plan
- Bajaj Allianz Young Assurance Child Plan·
- IDBI Federal Dream Builder Child Plan etc.
How Much Child Insurance Cover Do New Parents Need?
New parents should consider factors like the future expenses of their life, home and car loans, school and college fees, and everyday expenses of the family before choosing the benefit amount. As a general rule, new parents should choose a policy that offers a benefit equaling 10 to 15 times their annual salary.
The goal of life insurance is to replace the earnings of the parent and to protect the dependents from any financial crisis. Parents should calculate how much insurance they require after calculating all the financial obligations they will leave behind if they had to die unexpectedly.
New Parents Should Buy Insurance as Early as Possible
When it comes to life insurance, there is never a good time to buy it than now. New Parents should consider buying new insurance as soon as the baby is born. There is also a financial advantage to buy it at the earliest, as they may not get a better price in the future. Life insurance premiums seem to increase with every passing year and as age advances, there will be complications in getting the insurance approved, owing to medical reasons from deteriorating health.
It is Wise to Not Rely on Group Insurance
Many new parents think that the insurance offered by their employer is enough to meet the financial needs of the family after their death. It is true that insurance from the workplace is easy to get and is affordable, but the sum assured will be very minimal. Also, the group insurance from the employer will end when one quits the job and it is thus always beneficial to hold private insurance in hand to provide for the family.
You May Also Like To Read:- What Are Child Insurance Plans? How Do They Work?
Take Away
Life insurance of new parents will help their dependents to take care of their expenses and needs if the earning member dies. It is thus important for new parents to procure insurance at the earliest to provide a financial safety belt for their children and spouse.
