iFew things impact your life more than having a baby. Carrying a life inside of you makes you think more about yours, and you may be considering getting life insurance now to ensure your baby and family are always protected. Before you shop, there are some things you should know about buying life insurance when you’re pregnant. As you plan to welcome a new baby into the household, here’s what you should think about as you factor Life Insurance During Pregnancy into your family budget.
Can You Buy Life Insurance When You’re Pregnant?
Yes, pregnant people can purchase life insurance just like anyone else. The first trimester is the best time to buy as you’ll be given the lowest rates. Any type of pregnancy-related health conditions, like gestational diabetes, will make coverage a bit higher. If you have complications, then you are better off waiting until a month or two after delivery to apply. This will lower your rates again, which may open up the option for different types of policies that were previously out of your budget.
What if I Have a High-Risk Pregnancy?
You may be thinking about life insurance more seriously because your doctor has deemed your pregnancy high risk. These pregnancies can threaten either the mother’s, baby’s or both people’s health. Life insurance often requires a medical examination, and if you have gained weight or have other complications that put you at risk of delivery complications, you will be given higher rates. This is why applying as early as possible or just before you plan to conceive is recommended. If you are looking for money saving tricks to employ during pregnancy this is one of them. Having your examination in advance of any potential issues can be the difference of thousands of dollars annually.
What Type of Insurance Do I Need?
There are several forms of coverage available, but all of them can be split into two camps: permanent and temporary. Permanent coverage is designed to be long-term and a financial investment. It can generate a cash value, which you can sell the policy for later. If you plan on using your policy to save for your baby’s future or your own retirement, then permanent coverage is the right choice. However, this is the most expensive form of investment with premiums generally costing several hundred dollars a month.
Temporary coverage lasts for a specific term, usually 10 or 15 years. You cannot sell this form of coverage or earn anything back when the term ends. Permanent coverage can be sold at a later time for a cash value. This money can be put toward anything you want, though most adults who purchase it in their 20s and 30s plan to use it for retirement, a child’s college education or similar type of large investment. You can review a guide on everything you need to know about selling your life insurance policy for cash. This can help you compare plans and try to get the most possible out of your premiums.
Can My Unborn Baby Be Listed as a Beneficiary?
It is possible to include unborn children as death benefit recipients, but they may not be able to be listed as individuals. Instead, you could list all children you have or children born between you and your partner, who is also a beneficiary on the policy. Remember that all children under 18 will not receive funds directly in the event of your passing. You will need a court appointed guardian to retain the money on their behalf until they are of age.
What’s more important to consider is how a death benefit would be distributed to your children if you pass away before they are legal adults. They must be what insurance companies refer to as the age of majority, which is generally 18. If you do not have a guardian appointed and instructions in an estate plan on how your money is to be handled, then funds could be withheld for years.
The best way to protect your baby and other minor beneficiaries is to create a will. Estate planning allows you to lay out explicit instructions on who is to be the guardian of your children and how money is to be spent for their care in the event of your death. You can also set up a Uniform Transfers to Minor Act account. This account protects a child’s inheritance, but it is overseen by an appointed custodian until they reach age 18 or 21.
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