Finding out you’re pregnant is one of the happiest moments in your life. You’ve tried and you’ve tried and now it’s finally happened. Congratulations, you get to add a new bundle of joy to your family. In the days after celebrating, it’s likely the next thought on your mind is the future. You now have a new life to care for and you need to make sure you have all your ducks in a row before the baby’s born.
One of the first things I recommend to all expecting parents is to review their life and health insurance policies. If they don’t have one of these, I urge them to look into and purchase a policy as soon as possible.
Here are some questions you should ask yourself and your insurer when reviewing your life insurance policy:
- How much life insurance will our family need?
- Which kind of life insurance is best for us: universal, whole, variable, or term?
- How do we add a child as a beneficiary on our existing health and life insurance policies?
Term life insurance is the cheapest type of life insurance. It covers you for a specific term or time period and if you die before the term ends, your beneficiary receives a lump sum payment. If you outlive your policy, it expires. For expecting parents, this might not be the best option to choose. Unless you purchase a policy with an unusually long term, you now have dependents to worry about and don’t want to risk leaving them with nothing. Whole life, universal or variable life insurance policies are recommended for parents. They provide coverage for your entire life and won’t expire as long as you keep paying the premium. Universal allows you to set money aside for investment and variable life has even more investment options than universal, such as stocks, bonds, and mutual funds.
Not only will you need to consider life insurance, but looking over your health insurance should be one of the first things you do after you find out you’re pregnant. Ask your insurer or your employer these questions:
- How can you add your baby to you or your partner’s health insurance plan?
- Does your health insurance cover prenatal care, labor and delivery? If not, what will you have to pay out of pocket?
- Would an HMO or PPO plan serve your needs better?
- What is your employer’s family leave policy at work and what benefits are you entitled to under the law?
These questions are the perfect starting place for all expecting parents. Once you know the answers, you can start planning for the best financial and stress-free future for both you and your baby. One thing for sure, you can never save enough so consider skipping that extra night out and start putting away for a baby rainy day fund.