Frequently Asked Questions

Getting Life Insurance while you're young has several advantages: Lower premiums, the younger and healthier you are, allows you to lock in that better rate. Financial security for your loved ones in case of an unexpected event. Debt coverage, if you have student loans or other debts life insurance can help cover those costs so that they do not fall on your family. Building cash value, some policies offer cash value & the earlier it's started the more time it'll have to earn compound interest so that it can be used as an investment or savings tool. Health uncertainty, health conditions can arise at any moment and obtaining a life insurance while healthy will ensure you won't face higher rates or rejection due to health issues later in life. 

As a stay-at-home parent, it's natural to wonder whether both you and your partner need life insurance. Here’s a breakdown of the key factors to consider for both you and your partner. 

1. For the stay-at-home parent: Although you may not have a salary or an official income, the work you do is invaluable. Your role as a stay-at-home parent carries a financial value, and life insurance for you can help cover the costs associated with replacing your contributions.

• Childcare Costs: If something were to happen to you, your partner might need to hire someone to care for the children, which could be expensive.
• Household Tasks: You may also handle household chores (cooking, cleaning, organizing, etc.) that would need to be outsourced if you were no longer around.
• Other Contributions: Your emotional and logistical support to the family would also be impacted.

In short, having life insurance as a stay-at-home parent ensures that the financial burden of replacing these crucial services is covered.

2. For the breadwinner: For the working partner, life insurance is typically seen as more essential, since they provide the primary income that sustains the family. The death of the primary earner would result in a loss of income that could have a significant financial impact.

• Income Replacement: Life insurance can replace their salary to ensure the family can maintain its standard of living.
• Debt and Mortgage Coverage: It can also cover any existing debts or mortgage payments, preventing financial strain on the surviving family members.
• Education and Long-Term Needs: The policy can help fund your children's education or other long-term needs.

Ideally, both parents should have life insurance, especially if one stays home to take care of the children and household. For the stay-at-home parent, the coverage may be less than that of the working partner, but it can still play a crucial role in ensuring the family’s financial security.

Generally, a good rule of thumb to use is to multiple your annual income by 10 to determine how much coverage you would need. Another way to determine the amount of coverage needed is by using the DIME method. "D" stands for all your debt + "I" income x10 + "M" mortgage balance + "E" Education cost for all of your children ($60K/kid) = Protection Needed 

Typically, life insurance through a job is considered a group term policy and the amounts are not very high but are very low cost. It makes sense to take advantage of this but obtaining another policy outside of this will help provide the full coverage needed (please see FAQ on how much coverage you need). These group term policies usually end once you leave that employer, at times you may have the option to convert to permanent life insurance BUT the insurance company will use your current age to give you a rate. 

No limit. 

Term Life Insurance. This is because the policy will end after the contractual term and does not offer any cash accumulation. 

Living Benefits allows the policyholder to access funds from their policy while still alive. This is also known as Accelerated benefits. Living benefits can provide financial assistance during challenging times such as a chronic, critical or terminal illness. 

Life insurance for underage children can be beneficial for several reasons, some of the main reasons are:

1. Cash Value: Permanent life insurance builds cash value, which can be accessed whenever needed for expenses like college, a car or a home all tax free and is not considered an asset against FAFSA. Cash value is growing along with the index market with a floor making it safe of any market crashes- therefore no money is lost. 
2. Locking in Low Premiums: Premiums are lower for children, and buying early ensures they remain affordable for life.
3. Future Health Protection: It ensures coverage if the child develops health problems in adulthood.
4. Funeral Costs: It can help cover funeral expenses, reducing financial stress in a difficult time.