| Business

Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Be informed about life insurance

Email Newsletters

Sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

By The Associated Press
Saturday, May 17, 2014, 9:00 p.m.

Few milestones compel someone to buy life insurance coverage like becoming a parent.

Here are five tips for parents looking to buy life insurance:

Learn options

With term insurance, you pay a premium for a set period, commonly 10 years or 20 years, and your policy entitles you to a specific amount of money.

Whole life insurance policies cover insured individuals as long as they live. These policies function as savings vehicles. A portion of the premiums paid for the policy are invested to provide a pool of money that the policyholder can access, tax-free, while they're still alive.

Andrew Porter, a certified public accountant in LaFayette, Calif., advises clients who are new parents to avoid whole life insurance.

Determine priorities

Generally, an insurance agent will help you determine an appropriate coverage amount for the policy by examining some of the key costs your family will have, such as the cost of child care, education and a mortgage.

Another approach is to figure out how much income you're expected to earn over your lifetime.

Still, while it might be tempting to think of life insurance in terms of a dollar amount, it makes more financial sense to tie that amount to a goal, such as paying off a mortgage or college tuition, Porter said.

Buy a policy early

The cost of life insurance doesn't hinge on your credit rating, savings or assets. It's determined by your age and the results of a medical evaluation that's required every time you seek coverage.

If you're a couple in your 20s and healthy, you'll pay less than when you're in your 30s and 40s.

Insure both parents

It's common for both parents to work and contribute to household expenses and the costs of caring for their children. That's one reason experts recommend both spouses have life insurance.

But even in cases where one parent quits work to care for a young child, that parent should be insured.

Consult the pros

Wading through the trove of life insurance offerings can be challenging. It's best to consult with a financial adviser and meet with an insurance agent who can provide the most up-to-date rates and policy options available.

To find agents:

To find a financial adviser, try the National Association of Insurance and Financial Advisors:

Subscribe today! Click here for our subscription offers.



Show commenting policy

Most-Read Business Headlines

  1. Coal industry’s decline chokes Central Appalachian towns
  2. Shell closing Franklin Park office next year
  3. W.V. entrepreneurs offer hope as coal fades as economic engine
  4. Demand for surveillance systems boosts sales for Vector Security
  5. Pennsylvania Game Commission reaps revenue from shale gas under game lands
  6. University of Pittsburgh researchers revisit war of electric currents
  7. Cyber Monday increasingly a ‘blah-iday’ as deals rolled out earlier, longer
  8. Many Black Friday deals not worth the hassle
  9. Distractions can help keep riders alert in self-driving cars, study finds
  10. Energy Spotlight: Minking Chyu
  11. Fed slashes its emergency power options in crisis