Jeffrey Manola is an experienced life insurance agent and the founder of Top Quote Life Insurance. His mission when he created Top Quote Life Insurance was to provide online consumers searching for life insurance with the absolute best quotes for term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance. Not only does he strive to provide you with the ...

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Written by Jeffrey Manola
Founder & Licensed Agent Jeffrey Manola

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jun 29, 2022

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Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.

You have just started your family and want nothing more than to provide for them and give them what they need.

You have a steady job and are the provider for your household. Money is not an issue for you right now, and you are happy in your career.

But what if something terrible happens to you? Your family will no longer have the support they need to survive without you there.

This is why having life insurance is so important for the well being of your family.

Hopefully, it will never be used and will just be a small cost to you each year. But in the small chance that something happens to you, make sure your family will be able to survive.

Whether you are looking to obtain life insurance rates, or you’re ready to apply, this article will have all the answers for new families looking for information on life insurance.

Looking to compare life insurance prices? We can help. Enter your ZIP code to get free quotes from multiple insurers.

Life Insurance for New Families

Before you started your new family, you probably never thought about getting life insurance. No one has ever solely relied on you for his or her well being until now.

Adding an extra monthly expense is never easy, but life insurance is necessary now that you have a family to support.

Let’s dive in and discuss 10 life insurance tips for new families.

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#1. Purchase it while you’re young

Life insurance rates are determined based on several underwriting factors such as health history, lifestyle, and habits. However one of the biggest factors that will determine your life insurance rate will be your age.

Most young people are generally very healthy making them less of health risk to the life insurance company. In turn, life insurance companies provide very affordable rates for younger applicants.

Making it a commitment to get life insurance while you’re younger will pay off big time and end up saving you money because you are purchasing it while you are still in top shape.

Rates for life insurance coverage increase, as you get older so be sure to lock in a lower rate at a younger age.

#2. Know your Available Coverage Options

As with any type of insurance, there are many options for new families to choose from.

Life insurance has come a very long way since its start. There are many available options, features and policy riders that can enhance a basic life insurance policy.

Although there are many types of life insurance policies, life insurance, in general, can be categorized into two types, which are temporary and permanent.

Temporary, which is commonly referred to as term life insurance, is the most popular and most affordable option of the two types.

Term insurance provides temporary life insurance protection for a fixed duration of time known as term lengths. Term lengths often come in 10, 15, 20, 25 or 30-year contracts. When you purchase a term policy the life insurance rates will be locked in for the entire length of the contract.

Term insurance is often the best choice of coverage for most families. One main reason for this is because of its affordability based on the amount of protection you can get.

Permanent insurance such as universal life or whole life insurance, on the other hand, is much more expensive because it can grow in cash acting as a savings account but more so the life insurance coverage is guaranteed to remain active forever.

Instead of paying for a set number of years of life insurance, whole insurance will cover you for life.

#3. Understand How Life Insurance Works

Most life insurance policies are fairly simple to understand. There are four important roles in a life insurance policy: the insurer, the owner, the insured, and the beneficiary.

The insurer is the company that provides the actual life insurance coverage. When you purchase coverage from the insurer it creates a contract known as the policy that promises to pay out a sum of money upon the death of the insured as long as the policy is active.

The owner is the person who has full control of the life insurance contract. This individual has complete say so in any changes made to the coverage. The owner is also the only person that the insurer will give information regarding the coverage.

The insured is the person who is covered by the life insurance contract. In most cases, both the owner and the insured are the same individual.

The beneficiary is the individual who’ll receive the sum of money should the insured person die.

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#4. Figure out how much you need

Before you apply for a life insurance policy you will need to figure out how much protection you will need. Life insurance coverage can come in amounts as low as $2,000 and as high as in the millions.

When choosing an amount, an important thing to know is that it must meet the financial justification requirements of the life insurance company. This means you cannot choose any amount.

This means you cannot choose a $10,000,000 life insurance policy if there is no financial reasoning to justify that amount of coverage.

When it comes to applying for coverage each life insurance company will use guidelines to the amount of coverage you can apply for.

These guidelines are usually based on a multiplier of the amount of annual income you currently make.

Financial Justification Income Guidelines:

  • Ages 20-40 (Up to 30x annual income)
  • Ages 41-50 (Up to 20x annual income)
  • Ages 51-60 (Up to 15x annual income)
  • Ages 61-69 (Up to 10x annual income)
  • Ages 70+ (Individual consideration)

When determining an appropriate amount of life insurance coverage to apply for, ask yourself the following questions:

  • How much money would your family need to live off of?
  • What assets do you have?
  • Do you have any debt? If so, how much?
  • Are there any additional costs you should consider?

These are all factors that should be considered when deciding on an insurance amount.

#5. Decide on a Beneficiary

As mentioned earlier, one important role of the life insurance policy is the beneficiary. The beneficiary is the individual who will receive the death benefit upon the death of the insured. For families, this is generally the husband or wife.

There are two types of beneficiaries of a life insurance policy. The first one is called the primary. The primary beneficiary is the main or first person to receive the death benefit of the life insurance policy.

The second, which is not a requirement to have, is called a contingent beneficiary. The contingent beneficiary is the individual who would be the second in line to receive the death benefit money should the primary beneficiary passed away.

When it comes to naming beneficiaries it’s important to know that there must be an insurable interest. This means that the individual or individuals must have some type of financial impact should the insured pass away.

Typically, the beneficiary will be your spouse or children. In some cases, they will be a parent or other close relative.

#6. Consider the Provider

When applying for life insurance, it is important to do some research on different companies to find out their history and products they can offer. To help with this, we have listed an entire list of the best life insurance companies in the industry.

You need to be sure the provider you choose will be around for your life so you will always be covered, without having to change insurance providers.

You’ll want a provider that is reliable and helpful whenever you have any issues or questions regarding your insurance plan.

Most importantly, you need a provider who you know will pay out your insurance if something happens to you.

A good tip to finding a great life insurance provider is to look at their A.M. Best rating. The A.M. Best rating is a grading assessment that is used to determine an insurance companies ability to meet its financial obligation to its policyholders.

Grades of (A) or higher indicate that the insurance company is a solid choice for coverage.

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#7. Consider Insuring Both Adults

Many new families include two working spouses to support the household.

If both you and your spouse work to support your family, then it is important that you are both insured.

If your family’s livelihood is dependent on having two incomes, then losing one parent could be detrimental to your family’s well being.

Also, if there is an accident where both parents are involved, you need to be absolutely sure that the children and other dependents are taken care of.

If a family has a stay at home parent, coverage should also not be ignored them too. Think about the cost it would take to replace the services a stay at home parent provides to the family? This reason alone is enough to make sure they too are insured.

#8. Know Your Options Before Cancelling or Switching Policies

If you have a life insurance policy from when you were a child and are considering replacing or canceling it for a new policy, it is important to know what the best course of action is.

If you have a life insurance policy from when you were a child it’s a good chance it is a whole life insurance policy. Since whole life insurance accumulates cash growth be sure to check on the cash value and surrender charges.

The most important thing to remember when changing or canceling an existing life insurance policy is to make sure the new coverage is active before canceling any existing coverage.

Once a policy is canceled or lapsed, it can be extremely difficult to have it re-activated and in some cases not possible.

#9. Understand the Lingo

To have a better understanding of what you’re signing up for, it may be a good idea to learn some of the more common life insurance terms and their meanings.

This is definitely not a requirement of purchasing life insurance and a good agent will answer any questions and should explain in detail any unfamiliar terms.

However, having a good understanding of some of the more important terms such as beneficiary, premium, dividend, etc. could make the whole buying process a smoother process.

Many online life insurance agencies have general terms a definitions page located on their website. Pages such as those generally contain a wealth of information pertaining to some of the more common life insurance terms and their meanings.

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#10. Hire an Expert

The Internet is a great place to begin your search for great life insurance coverage but be sure to ask for help. Life insurance is not a one policy fits all type of purchase.

Each life insurance company has its own niche whether it’s in underwriting, rates or unique coverage offerings. If you’re thinking about coverage or are ready to purchase be sure to reach out to an expert.

Seek the help of an independent agency. An independent life insurance agency life Top Quote Life Insurance works with many life insurance companies, not just one or a few.

By working with an independent life insurance agency they will be able to fit you with the best life insurance company based on your own unique criteria.

Since everyone’s needs are different this is very important. It allows for the agency to shop your coverage ensuring you’re getting the best deal.

Experts have worked with hundreds of new families buying life insurance, so it makes sense to consult one if you need any guidance.

For Further Assistance

We have dedicated our lives to the world of life insurance, and want to make sure that you and your new family have the best coverage for the lowest cost.

If you have any more questions about whether you should get life insurance, what type to get, how much insurance you’ll need, or anything else related to life insurance, please contact us now.

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