Speak with an experienced advisor! 212-573-5563Married couples share nearly everything – from chores to leftovers. They also often share the responsibility of bringing home a paycheck for their family. In fact, nearly half of married-couple families were made up of two employed partners. If your family depends on two paychecks to make ends meet, it’s important to make sure that both parents have a life insurance policy – not just the primary breadwinner.
Stay-at-home parents are another important consideration. They are a jack of all trades — caregiver, teacher, nurse, chef, driver, psychologist, and activities director, to name a few. If the stay-at-home parent passed away, the surviving parent would likely need to source paid help to take over those services.
For instance, let’s say that your significant other watches your baby at home while you’re at work. If he or she passed away, you might need to make plans for your child to go to daycare. The average cost of center-based daycare for infants ranged from $6,615 to $19,805 depending on where you live. Life insurance can help to cover those unexpected expenses, lessening the financial hardship during an already emotionally difficult time.
Not married? Life insurance for single parents is vital to your financial plan as well. Maybe you’re one of two dads running the household, a single mom or a recent divorcée. Every family is different and so are its needs for life insurance. But all parents share have one thing in common — the desire to protect their children. Life insurance for your family can be a way to help you do just that.
Naming Your Beneficiary
When you buy a universal life insurance policy, you name a beneficiary, such as your spouse, to receive the life insurance money. Don’t name your young children, though, even if you want the money to benefit them. If the beneficiary is a minor when you die, the life insurance company can’t pay the benefit until the court appoints a guardian.
Instead, one option is to set up a life insurance trust to hold money and property for your children and name the trust as the beneficiary. You appoint a trustee, such as your spouse or another adult, to manage the trust according to your instructions. An attorney can help you set up a trust, and the life insurance company can tell you how to word the beneficiary designation.
What Factors Go into Pricing a Universal Life Insurance Contract?
Annual price of a universal life insurance policy depends on the amount of coverage and a gaggle of other aspects. Other factors include:
- Age: The younger you are the less you pay.
- Sex: Women generally pay less than men.
- Health: The healthier you are the less you pay.
- Smoking habits: Smokers pay more than nonsmokers.
- Hobbies: People with risky hobbies, such as scuba diving, pay more for coverage.
Is Universal Life Insurance Right For You?
Overall, obtaining a universal life insurance contract when you are expecting a child in the near future may be the best choice to protect your family. The death benefit will provide financial help in the worst-case scenario. Having the death benefit there to protect your family during your children’s earlier years into and throughout their college years might be the best way to safeguard your family.
