Finding out a little one is on the way should is exciting and joyous time in your life. Whether you are first-timers or total veterans in the parenting game, a new addition to the family requires serious preparation. Besides loading up on the diapers and smothering yourself in swaddle blankets, you need to consider other essentials like increasing your insurance.
First thing’s first – if you are adding a new member to the family, you should increase your life insurance.
Start with taking a look at your current financial situation and estimate how much you are going to need for the future. This estimation, of course, varies depending upon each family’s circumstance. For example, a parent welcoming a newborn will have much more time to prepare for college tuition fees than a parent adopting a 10-year old. Keeping that in mind, it is also a good idea to reassess your insurance needs every three to five years to ensure that your current policies sufficiently cover your family’s financial needs.
Secondly, both spouses should consider life insurance coverage, even if only one is employed outside the home. Insurance policies can help a surviving spouse with financial necessities of the household in the event that the stay-at-home parent passes away.
Lastly - know the types of life insurance:
· Whole Life Insurance is the more expensive option, but very beneficial. This option offers policies that build cash value and pay a death benefit. If whole life insurance is not in the budget right now, you can consider term life insurance with a conversion option that will allow you to switch to whole life insurance for a fee when you are ready.
· Term Life Insurance covers death benefit protection for a specific period of time. While the policy is inexpensive in the younger years compared to permanent life insurance, it does increase with age.
More family members mean less room in the household, which might call for some home improvements. If you are planning on accommodating your growing family with major home additions (typically anything over $5,000) you need to notify your insurance company. If not, you could be underinsured!
A growing family also means a backyard overtaken by swing sets, trampolines, swimming pools, and plenty of other terrifyingly fun items. If you own any of these, you should inform your insurance company as well as consider increasing your liability coverage. Liability coverage will protect you in the event that someone is injured while on your property.
So long sports car, and hello minivan. Okay, maybe a minivan is not your style, but your growing family needs an upgrade! Whether it be a minivan or SUV, purchasing a larger vehicle may affect your premiums, so make sure to check your rates before you do so!
Also consider increasing liability insurance if you are planning on carpooling. You want to be covered in the case of an accident when transporting other children!