Life insurance can be a tricky subject, and many policyholders are unsure how a major life event might affect their coverage. For instance, is your policy invalidated upon the birth of a new child? Will the monthly premiums increase? Do you have to update your personal information to reflect the new addition to the family? Randolph County Farm Bureau, the most trusted insurance agency in Asheboro and Randleman, NC, explains the situation below.
How Does a New Child Affect Your Life Insurance Policy?
In short, your life insurance policy is not at all affected by the birth of a new child. Unlike with health insurance, you do not need to notify your insurer of a new dependent, the premiums do not increase, and it will continue in effect until the term expires or you pass away, depending on the policy. However, because of the changed circumstances, you could re-evaluate the amount and type of coverage you want. The old policy might no longer meet your needs or fit in with your long-term goals.
How Do You Re-Evaluate Life Insurance After the Birth of a Child?
Presumably, your old life insurance policy paid enough of a death benefit to cover the final costs and help your spouse, if any, adjust to life without your income. However, the birth of a child might change your coverage needs dramatically. For instance, will your spouse need to take time off work to care for the child? Do you want the death benefit to provide for the child's education? Did the pregnancy and hospital care result in the family accumulating debt? If the answer to any of these is yes, then it's a good idea to calculate the additional financial challenges your survivors will face and discuss a policy update with an insurance agent. Do this after each subsequent childbirth, as well, so the death benefit is substantial enough to provide for your dependents’ needs.
To discuss your life insurance options with an experienced professional, contact Randolph County Farm Bureau in North Carolina. They are a one-stop shop for all your home, life, liability, and auto insurance needs. Visit their website to learn more about their products, or call (336) 629-9187 for the Asheboro office or (336) 822-9573 for the Randleman location to speak with a friendly, helpful insurance broker.