Why life insurance makes so many expecting parents very nervous
Earlier this week, we discussed why families should reconsider purchasing life insurance for stay-at-home parents. Specifically, how this investment safeguards working parents and children in the event of an untimely passing.
While life insurance is a necessity for this particular family dynamic, what about other households? For example, do the same arguments in favor of planning for the unimaginable apply to expecting parents?
Experts indicate that the answer is yes — whether one or both of the expecting parents works. Unfortunately a death would leave the remaining parent with major child-rearing expenses. Given this reality, it’s alarming to learn that many parents aren’t making life insurance a priority. Worse yet, they may be doing so for all the wrong reasons.
Consider a recent survey asking expectant couples, or those planning to have children in three years, to identify the largest child-rearing expenses. The three most popular guesses were: diapering items (50 percent), childcare (37 percent) and life insurance (30 percent).
The analysis suggests that many expecting parents are declining to purchase life insurance believing that it’s cost prohibitive. Understandably, soon-to-be parents have financial concerns. However, it’s important that potential costs align with reality and unforeseen events.
One financial website found that two healthy 30-year olds could secure 20-year term life policies at a combined annual cost of $762. By comparison, it found the average annual bill for diapers and wipes was $743.
Families’ might want to make seeing an insurance broker part of their baby plans.
Are you an expecting parent who has opted to go without life insurance? If so, why?
Source: NerdWallet, “Having a baby? Don’t skip life insurance because of cost,” Elizabeth Renter, March 30, 2017