Congratulations on becoming a new parent! Now that your family is growing, your sense of responsibility is probably growing alongside it too.
When you become a parent for the first time, it’s natural to begin thinking about how you’ll plan for the future and give your little one the best life possible. If you’re considering taking out life insurance to protect the newest additions to your lives, here’s a few tips to make sure you get a policy that suits you.
Determine how much cover you need
Now that you have a minor dependent, you’ll need to make provision for them. This includes school and university fees, medical aid payments, any inheritance you want to leave them and the general costs of living for 18-21 years. It can be hard to calculate exactly how much life cover you need, but there are some guidelines here. A good basic rule of thumb is at least 10 times your yearly salary – but this number can go up or down depending on a number of factors including your costs of living, your debts, the number of dependents you have and whether they have any special needs, and many more.
Look into cover for both parents
Though you might think that only the breadwinner in the relationship needs life cover, the reality is that in most cases, it’s sensible to get life insurance for both parents. This is because even if one parent isn’t the main earner, their death would still have financial implications for the rest of the family. If the non-earning (or lesser earning) partner passed away, would your living costs increase? Would you need to pay extra in childcare or in transport fees for a shuttle to school? Would you need to employ a full-time nanny or domestic worker instead of only once a week? There would also be costs associated with the death of either parent – perhaps in the form of immediate funeral expenses or in the longer term, outstanding car payments or credit card debt.
Take it early
Life insurance is cheaper when you take it out while you’re still young and healthy. Don’t delay and wait until you start to feel the effects of aging or ill health. Your premiums will suffer for it and you may not even be able to get cover. Instead, sort out your life insurance while you’re still young and have peace of mind from early on. Generally, people over estimate the cost of life insurance quite significantly – so you’ll probably find that the monthly cost of a comprehensive life policy is more affordable than you thought. Not convinced? Get a quick quote here to see how much you could be paying for cover.