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The Insurance Dilemma
What you need to know about insuring your family.Whether you are just starting a new family or are well into the terrible teen years, it's a good idea to evaluate your insurance options on a consistent basis.
What may have been adequate at one point may be too little coverage or you may be paying too much for it.
Insurance planning for a new family, while the parents and children remain relatively young, ends up saving a great deal of money over the duration of your policies.
People rarely buy insurance with the intention of ever using it; We buy it for peace of mind in the event of needing it. In the current financial climate, it may seem like an area of your budget that can be trimmed down or eliminated, but think about this: Would you rather be responsible for a reasonable health insurance copay or a few hundred or thousand dollar hospital bill in the event of a medical emergency? Health insurance coverage would definitely pay for itself in this instance.
Over the course of our lives we will have many important decisions to make regarding our families, but few are more important than those that deal with health, mortality, and general well being of ourselves and our children.
Health Insurance
There are fewer issues today that get consistent attention from the media and government than health insurance. For better or for worse we have the system that is in place.
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As parents and spouses we have a responsibility to our families to ensure that all members of our home are taken care of to the best of our abilities. Regardless of what we do, however, there will come a time when someone will get ill. The cost of premiums is on the rise and more companies in the US are reducing coverage or cutting coverage all together.
If you or your spouse is covered under a group policy from work then your spouse and children should almost certainly fall under that coverage. It may still be early in your family considerations, but if you are due to have a child you should notify your insurance company to ensure the child is covered from the day they are born.
If you do not fall into that category, individual health plans may be the best route to go. Often times these plans offer reduced rates to bring on additional family members, however the insurance company does not have to accept you unlike most group insurances through spouses. For children, individual plans are generally very affordable even for children with disabilities.
Another option for child insurance is the Children's Health Insurance Plan (CHIP). This is a government-based program through your state to help those families who wish to insure their child but may not have the finances in place to do so.
Even if our children are the best behaved kids in the world and in great health, they may very well get hurt playing a sport or falling on their bike. Making sure they are insured is crucial. Relatively minor injuries like a broken arm can cost thousands of dollar for the care and x-rays. A small copay will be much easier to handle than footing the bill straight from your own pocket.
Life Insurance for Young Parents
If you are a young parent and just starting a family, you likely have a mortgage and many other bills to take care of. It is for that reason that many insurance agents and financial planners will recommend you buy term life insurance.
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Of course you hope to never have to use it, but in the event of the unthinkable it is good to know that your family will be taken care of for years to come.
The advantages of term life insurance is that it is very affordable for younger adults. A term policy is one that covers a set period of time, whereas a whole life policy covers, well, your whole life. The reason a term life policy is appropriate for young parents is that it is very affordable and once the policy ends you and your family are likely more stable financially and thus the need for the policy is lessened.
Despite the best of financial planning, things may not work out just as you had intended and term life insurance may not cover everything. A solid piece of advice in the industry is to take a small permanent whole life insurance policy as soon as you are able. Remember, the younger you buy it the cheaper it is. This creates a safety net for your family regardless of what age you are. Buying a whole life policy can be an affordable and smart idea.
Life Insurance for Children
Many people do not get life insurance for their child. What many do not realize is that getting a whole life policy at a young age for a child is essentially a life long gift. The policy will cover them for their entire life without having to show evidence of insurability and it will accumulate value as your child matures. A whole life policy can be borrowed against as an asset and thus allows for flexibility in their financial future.
When looking into a life policy with the funds going to a child with a disability , you should consider setting up a Special Needs Trust. This will allow for the money to be given to the person, but not remove government benefits from them due to the influx of new incomes that they may be entitled to.
Many young parents, and some older, do not have much insurance experience and the details of various policies may not make sense. When any questions arise that does not have a quick answer, contact a local agent. It is also important to get various quotes on insurance to get a good idea of how insurance will affect your budget.
This article was written by Barbara Waltz, one of the founders of 247QuoteUs.com, an online resource blog and insurance quote comparison guide.