Being a new parent is stressful enough without worrying about buying the right life insurance policy. Having coverage in place is necessary, however, both to protect your family in the event of the unthinkable and to plan for your financial future. If you have questions, this comprehensive guide for new parents will provide the answers you need. 

How Premiums Are Priced

There are a number of factors used to determine life insurance premiums. Your age is a major factor, as younger people are usually privy to lower insurance costs. In the same respect, people in good health are also subject to lower premiums, as are those who forgo smoking and drinking. Because insurance is calculated based on risk, people with intense hobbies like sky-diving or snowboarding may be charged more for their policies. 

Term Life vs. Whole Life

You’ll need to decide between a term or whole life policy, both of which offers specific benefits:

• Term Life: These policies cover a pre-specified term, which usually ranges from 10 to 30 years. They’re considered more affordable, which makes them a good choice for families just starting out. However, if you outlive the term, your family won’t receive any benefits unless you sign up for a new policy.
• Whole Life: This coverage is available as long as you continue paying your premiums. While more expensive, these policies also contain an investment component. They accrue cash value, which can be borrowed against when needed. 

How to Determine Insurance Amounts

A comprehensive financial accounting is needed to determine a sufficient insurance amount. If you’re the primary breadwinner, think about how much money you contribute to the home while also considering how many years of income your family will need to survive without you.

Factor in costs for future college education or medical needs that your family currently has. Once you have a figure in place, subtract any savings or any assets you have that can be used to support your family. 

Making the above calculations on your own can be complex, which is where Sun Valley Insurance comes in. These insurance agents proudly support Indian Trail, NC, locals in search of reliable and affordable insurance products. Because they’re an independent agency, they leverage their strong relationships with nationally known insurers to ensure you receive the best service possible. Along with life insurance policies, they’ll also help you find auto coverage, home insurance, and policies suited to small business owners. Talk with an agent today by calling (704) 282-1155 or visit the website to learn more about residential insurance services.