Let’s cut to the chase. Kids are expensive to raise.
Raising your little one from the crib to college can be quite an investment. According to a study from the U.S. Department of Agriculture (USDA), an average middle-income family might spend around $233,000 to raise a child up to the age of 17. This figure includes the cost of your home or apartment and everyday essentials like food and childcare. However, it doesn’t cover higher education.
When you add college into the equation, the expenses go up. While your family might qualify for financial aid, it may not be enough to cover the increasing costs of college.
Whether you’re already a parent or just starting a family, many financial and insurance experts suggest understanding the cost of having a family and how life insurance can safeguard your loved ones if something unexpected happens to you. As a guideline, choose a coverage amount that will support your loved ones for the number of years they would depend on your income.
Every parent should think about getting life insurance. Even if you already have a policy through your job, it might not be enough once you have a little one. Life insurance offers parents peace of mind, knowing their kids will be taken care of no matter what. As your family grows, you might take on big expenses like a mortgage or a new car. New parents should see life insurance as more than just an optional financial product. It's a crucial part of planning for the future, helping to protect your family in the long run, no matter what surprises life throws your way. Get a qoute today!
If you’re a stay-at-home parent, you should also think about getting a life insurance policy. Why? Consider the immense value you bring to your family. Just replacing childcare could cost over $16,000 annually. Adding the cost of a housekeeper, it's clear how a surviving parent could face significant financial strain. In fact, according to Salary.com, a stay-at-home parent's annual salary would be around $162,000.
These expenses can quickly add up, especially during a challenging time when the family is trying to recover. So, don’t underestimate your worth as a stay-at-home parent. Having a life insurance policy can help fill the financial gap when your family needs it most.
A beneficiary is the person, people, or trust that gets the money from your life insurance policy if something happens to you while the policy is active. As the policy owner, you get to choose your main beneficiary (or beneficiaries) when you fill out your application.
For many parents, the main beneficiary is usually your spouse, your life partner, or your kids. Once you pick a life insurance policy that fits your family’s needs, you’ll feel good knowing you’ve taken a big step to protect your family’s financial future. Life insurance will be there to help replace income, pay off debt, cover education costs, and handle living expenses that might come up for your family for years to come.
Every family is unique, and that’s important when picking the right life insurance policy for your needs. There are two main types of life insurance: whole and term.
Whole life insurance is permanent and stays active as long as you keep up with the premiums, typically for your entire life. Term life insurance, on the other hand, covers you for a specific period. At Ethos, we offer term lengths from 10 to 30 years and coverage options ranging from $20,000 to $1.5 million. With our term life insurance, you’ll pay a fixed premium for the duration of the policy, so your rate won’t go up during your initial term.
So, how do you choose the best plan for your family? Start by looking at your current financial situation. For instance, if you’re a new parent, you might want a 30-year term policy to cover your child until they’re an adult. If your kids are already in college, a 10-year term might be enough to cover their education and any other unexpected expenses.
For new parents, term life insurance can be a great choice. It’s often up to 20 times more affordable than whole life insurance and provides coverage during the years you need it most, without costing you money when you no longer need it.
Ultimately, the best life insurance policy is the one that fits your family’s unique needs. The premium you pay can vary based on the company and personal factors like age, health, and the amount of coverage you choose.
Determining the appropriate amount of life insurance for your family is not a one-size-fits-all decision, particularly if your family is expanding. Many individuals seek sufficient coverage to address all life expenses, including home mortgages, college tuition, and daily living costs. Numerous factors must be taken into account.
The primary objective of purchasing life insurance is not merely to replace your income but to safeguard your loved ones from financial hardship. Consider all significant financial obligations that may remain if you were to pass away unexpectedly, such as your home, business, and any debts for which you have cosigned.
A general guideline is to multiply your annual salary by 10 to estimate the amount needed to replace lost income. Additionally, you should account for any existing debts, including mortgage payments, projected education costs, childcare, and general household expenses. It is also advisable to include extra coverage to support your spouse's income for one or two years, allowing the surviving parent time to grieve without the immediate pressure of returning to work. If your spouse is a stay-at-home parent, consider estimating their potential annual salary if they were to re-enter the workforce. For further information on selecting the appropriate type of life insurance plan and understanding the costs involved, please consult additional resources.