What Smart Portland Parents Can Do To Protect Their Children

Are you a new parent? Do you want to make sure your family and newborn are safe and protected? Have you been neglecting dealing with life insurance?

The fact is, you’re not alone. New parents across the country have a lot of tough choices to consider when it comes to securing protection for their new child. For many families faced with too many options, the easiest choice is to simply do nothing. A recent study of new millennial parents confirmed this, showing that 75% of them don’t have a personal life insurance policy.

Sure, we might pride ourselves on being unconventional here in Portland, but in many ways, we still face the same concerns as the rest of the country. For instance, if a parent died or lost their job 4 in 10 households with children under 18 say they would immediately have trouble meeting everyday living expenses.

And when the security of life insurance is missing from your family’s financial picture, you might find yourself dealing with loss of your home or even bankruptcy. This can turn into generations of obstacles to overcome when a child’s home is disrupted. They may have to change schools, it’s a struggle to cover the cost of higher education, and it can have a long-term negative impact on their financial situation well into adulthood.

But the situation doesn’t have to be dire.

Three Steps To Identifying Your Family’s Ideal Insurance Plan

I get it, insurance isn’t the most exciting subject in the world, but when you invest a small amount of time put the right plan in place, you and your family can rest assured that you’re protected when you need it most.

So how do you identify the right plan? Well, here are three steps every family should undertake:

Step 1: Determine how much life insurance you need

There are two approaches to figure out what amount of coverage you might need. The first (and more thorough) approach is to calculate the sum of your current debt (beside your mortgage), how many years of income you’ll need to provide, your mortgage balance and the number of years remaining before it’s paid off, and final expenses (usually at least $10-$12K per person).

Alternatively, you might try an easier approach (and one that usually comes close to the more complex calculation above). Using this method, you simply multiply your current annual income by ten. It’s not exact, but it will put you in the right ballpark.

Step 2: Consider the needs of others

If you have a spouse or partner, have a conversation about what you feel is important to provide for the partner and child in the event that something unfortunate occurs.

If you are a single parent, determine what you intend to provide for your child and until what age. Studies show that raising a child currently costs an average of $14,000 per year, and that doesn’t include expenses like college or housing during college.

Step 3: Educate yourself on all your options

You’ve probably heard about different types of life insurance such as Term Life and Whole Life. But do you know about Index Universal Life? Or how about Increasing or Decreasing Term? And don’t get me started on Variable policies!

I know this is overwhelming. And that’s why it doesn’t surprise me that so many new parents haven’t done anything to protect themselves or their families. I’ve been working with clients for more than a decade who have found it difficult to sort through all the options on their own.

So the best way to get educated is to sit with an insurance professional to determine which plan is most appropriate for your needs.

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ABOUT THE AUTHOR

Portland native Corey Kaster started his NE Portland insurance agency in 2006.

When he’s not helping protect his community members and their families, you’re likely to find him hiking and exploring the beautiful outdoors of the Pacific Northwest.