Becoming a parent is a life-changing experience filled with joy, excitement, and new responsibilities.

Amidst the preparations for welcoming your little one, it’s crucial to review and update your various insurance policies. This can potentially provide peace of mind and financial security for your growing family.

 

Health

Before welcoming your baby, review your existing policy to ensure it covers things like maternity care, and assess what coverage you’ll need for pediatric services and subsequent checkups for your baby. Having a child is a qualifying life event, so you’ll be able to add them as a dependent and adjust or upgrade your coverage as needed. Just make sure to check with your provider about deadlines and specific requirements.

Life

Life insurance is a vital component of financial planning for new parents. The primary purpose is to provide a financial safety net for your family in the event of an untimely death. So if you don’t currently have a life insurance policy, now is the time to get one. Assess finances to ensure you purchase a policy, whether it whole or term, that adequately covers the obligations you would leave behind, including mortgage or rent, student loans, and other debts.

Homeowners or renters

With the addition of baby-related items or home upgrades, your home becomes even more valuable. Update your homeowners or renters insurance policy so it covers the increased value of your possessions and property, and be sure to add any new items, including baby gear, furniture, and electronics, to your personal home inventory. Additionally, evaluate your liability coverage to protect against potential accidents or injuries that may occur on your property, such as those involving pools, trampolines, or playground equipment.

Auto

If you’re considering upgrading your vehicle to better accommodate your growing family, make sure to check with your insurance provider about premiums. Depending on the age and size of the car you purchase, your monthly cost could end up being higher or lower. It’s also a good idea to review your current auto insurance policy to ensure it provides adequate liability, collision, and comprehensive coverage, especially if you plan to partake in carpools in the future. And you’ll want to check that your policy provides coverage for a car seat, meaning your insurance provider would likely pay for the cost of a replacement should you ever be involved in an accident.

Disability

Disability insurance can help replace a portion of your income if you become unable to work due to an illness or injury. This can be a valuable tool for new parents since your ability to earn a living is crucial for supporting your child. You can purchase short-term or long-term disability insurance, either of which can go a long way toward helping you and your family through any challenging circumstance.

As new parents, it’s incredibly important to protect your growing family’s financial security. Consider consulting with an insurance professional or financial advisor who can provide valuable guidance in choosing the right policies and coverage amounts for your family’s specific needs, allowing you to better focus on the joys of parenthood without unnecessary financial worries.

 

Important Disclosures

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.

This article was prepared by ReminderMedia.

LPL Tracking #1-05374815

Christina Shockley, JD, CFP®

Partner & Chief Planning Officer

INTRODUCTION

 

Imagine you’ve poured your heart, soul, and countless hours into building your business. It’s not just a company; it’s a part of who you are. But what if, in an unforeseen moment, everything you’ve worked for is at risk because of a sudden loss? What if a key player in your team, perhaps even you, were to pass away unexpectedly? Would your business survive, or would it crumble under the weight of the loss?

 

Sadly, many business owners find themselves in this exact scenario, unprepared for the impact of a death on their business operations and financial stability. A well-designed life insurance plan can offer a solution to these worries, providing a safety net that ensures continuity and security.

 

THE WAKE-UP CALL

 

Consider the story of a small tech firm, thriving and on the verge of a breakthrough. The unexpected death of their lead developer threw everything into chaos. Projects stalled, client confidence wavered, and the financial stability of the firm was threatened. Without the developer, not only was the team’s morale affected, but the company also faced potential financial ruin. This is where life insurance steps in as a critical tool for business planning.

 

KEY PERSON INSURANCE: THE BUSINESS LIFELINE

 

Key person insurance is a type of life insurance taken out by the business on the lives of crucial employees whose death would cause a significant financial loss to the company. This coverage helps mitigate the risk, providing the business with financial support to navigate through the tough times. It can cover lost income, provide funds to hire a replacement, or, if necessary, pay off debts, distribute money to investors, or even close the business in an orderly manner.

 

BUY-SELL AGREEMENT: A SMOOTH TRANSITION

 

Another critical aspect is funding buy-sell agreements with life insurance. These agreements ensure that the remaining business owners have the means to buy the deceased owner’s share of the business, preventing external parties from stepping in. Life insurance policies fund these buyouts, ensuring a smooth transition and uninterrupted operation of the business.

 

PERSONAL PROTECTION FOR BUSINESS DEBTS

 

Business owners often secure loans with personal assets. Life insurance policies can provide the means to cover debts and protect personal and business assets, ensuring that your legacy and your family’s financial security are preserved.

 

QUESTIONS TO PONDER

 

When considering life insurance for business needs, ask yourself:

 

• Who are the key people in my business whose loss would be catastrophic?

• Do I have a buy-sell agreement in place, and how will it be funded?

• What debts are tied to my personal assets, and how can they be protected?

• How can I use life insurance to ensure the continuity of my business for my employees and their families?

 

CONCLUDING THOUGHTS

 

Life insurance offers more than just individual security; it’s a strategic tool for business planning. It protects against critical risks, ensuring that your business can withstand the shocks of unexpected losses. By carefully considering your needs and planning accordingly, you can shield your business, your employees, and your family from financial turmoil. Don’t wait for a wake-up call; the time to plan is now.

 

 

 

This material contains only general descriptions and is not a solicitation to sell any insurance product.  Guarantees are based on the claims paying ability of the issuing company.