New to parenthood? Wondering about financial security? Here is everything you need to know about Life Insurance.
Welcome aboard the parenthood boat! With timely feeding, diaper changing, baby-proofing your house, lullabies, and squeaky toys everywhere, you are sure to have an eventful time, if not an easy one.
You have been planning for months. Setting up the baby’s room, getting a cot, stocking up on nappies and gearing up for the sleepless nights to follow. And let me guess, you are already thinking of names. Well, that’s a great start. But with a baby on board, what you need is a closer look at your finances.
Say hello to Life Insurance! It is a risk cover that will ensure that your family has necessary funds in the event of your untimely demise. Emergencies cannot be avoided. But planning for the worst can keep you a step ahead.
How does it work?
A Life Insurance is a bond under which an individual is offered financial protection by Life Insurance companies. Under this contract, the individual must pay the insurer a premium over a period of time, depending on the nature of the contract.
Why should you invest in Life Insurance?
Let’s imagine that you have met with a horrible accident on your way to work, hospitalising you for months and leaving you without a source of income. When such unprecedented situations occur, you can bank on your Life Insurance policy for a continued supply of money.
As a parent, there are plenty of reasons for you to seek Life Insurance. Let’s face facts. Medical bills, childcare expenses, and education loans are some of the things to consider after you have a kid. Paying for school and college is becoming an increasingly expensive affair. With a proper Life Insurance plan, you can ensure that your kid still gets the education he or she deserves even when you are not around.
Additional reading: Everything You Need To Know About Life Insurance
Factors to consider before investing in a Life Insurance policy:
- Who are dependent on you for financial support?
Your children, spouse, elderly parents, and joint holders of debt if any, are possible dependents who will need an insurance coverage.
- Do you have enough savings to offer support?
As a new parent, your family is just growing. Let’s consider that you haven’t had enough years to save for long-term needs of your family. In that case, Life Insurance serves as the best support you need.
Having said that, it’s never too late to start saving. Surprised? Visit the link below for ways in which you can start saving.
Additional reading: Money Saving Tips For First-Time Parents
- Estimate your future needs
More simply, figure out the extent of the monetary support you need to offer to those dependent on you. If you are the sole bread-winner of your family, determine how many years of income you will need to provide for.
Here’s a tip: Try to include inflation into the picture, as rising prices will definitely affect your future needs.
With answers to these questions, it will be easier for you to choose among various Life Insurance policies out there.
Additional reading: Top 5 Life Insurance Plans Of 2018
Deciding the type and tenure of the Life Insurance you need:
With a fair estimate of the sum of money, you will need, you are well on your way to choose a Life Insurance cover wisely.
The more dependents you have, the higher is the coverage needed. Also, don’t forget to consider outstanding loans and mortgages. Be it a Home Loan, Personal Loan, Car Loan or a Two Wheeler Loan, your Life Insurance cover should be well-matched to your loan repayment needs.
You can choose the kind of Life Insurance you want depending on the period of time for which you need coverage. Term Life Insurance offers financial assistance for a specific tenure. On the other hand, Permanent Life Insurance provides lifetime financial coverage.
Tip: Make sure to read the Terms and Conditions of a policy carefully before buying it. Choosing the wrong policy can put your family at financial risk.
Additional reading: FAQs on Life Insurance
We know you want the best for your family. And why not? So here’s another tip. As a parent, you can also open a Savings Account or Fixed Deposits to secure funds for your family. Health Insurance, Home Insurance, Car Insurance, Travel Insurance, and Two Wheeler Insurance are other financial safeguards that you can consider.
And hey! If you need any advice regarding Life Insurance plans or financial guidance of any sort, feel free to reach out to BankBazaar. We are always happy to help!