Bringing a life into the world means it's time to get life insurance if you don't already have it, or up your coverage if you do.
Becoming a parent is one of those life-changing occasions that compels many people to buy life insurance, because, underneath the joy and excitement of bringing your newborn home for the first time is also concern for the future, especially when it comes to finances.
From a money standpoint, your finances will never be the same. On average, it costs almost $254,000 to raise a child in Canada to the age of 18, according to MoneySense.ca. Given the high cost of raising a child, not to mention your regular monthly expenses, and the importance of setting aside time to do some serious financial planning cannot be ignored.
The same is true of life insurance, which is a key component of your overall financial plan. Now is not the time to say "someday" or "later" because the fact is you now have a little one who is relying on you. It's a lot of responsibility and with it comes the responsibility of preparing for the "what if" scenario. What if something happened to either parent, and how will it affect the family financially? There's a lot to consider, because there's a lot at stake.
How much is enough life insurance?
Typically, industry insiders will suggest that you have five to 10 times your annual, pre-tax salary in life insurance protection; however, everyone's situation is unique. When applying for coverage the life insurance professional will need a full understanding of what it costs to run your household. They'll also need a firm grasp of what it is you want the insurance to do. For example, do you want to have coverage that will:
- Fully cover the cost of funeral arrangements?
- Go towards the costs of raising your children?
- Pay off outstanding debts like a mortgage, car loan or credit card debt?
- Contribute to the costs of post-secondary education of your children?
- Leave your children with an inheritance?
- Give the surviving parent the means to temporarily leave their job, or reduce their hours, until they get back on their feet?
- A combination of all or part of the above?
Of course, as you have more children, it's a good idea to review your life insurance needs. As your family grows and there are more people to provide for, you may need to consider adding more coverage.
When baby makes three, or four, or more
Starting or growing a family means that you have to plan ahead, no matter what the future may hold. Face the future head on by knowing your family is protected; compare life insurance quotes today.