I'm just starting a family - do I need life insurance?

You buckle her into her carseat for even the shortest trip down the street. He's never missed a well-baby checkup and you wash his little hands (and yours) constantly. As a new parent, you do everything you can think of to keep your baby safe and secure.

But what if someday you weren't there to pay for his checkup? Or you lost your spouse to illness or injury and had to face raising your child alone? You've heard life insurance can help protect against those unpleasant possibilities, but you may not be sure you really need insurance, especially if your family is very young and healthy.

If you're the sole breadwinner for your family, it's likely you may have trouble meeting expenses without your income. The loss of a stay-at-home parent could also jeopardize a family's financial future, because the surviving spouse would need to find a way to fill in for all the unpaid services a stay-at-home parent provides, from childcare to housekeeping. According to Salary.com's mom salary calculator, the average stay-at-home mom performs jobs that would add up to an annual salary of more than $117,000 if she did them outside the home.

Once you have the responsibility of supporting a family, paying a mortgage or repaying any other debt, it's reasonable to investigate your insurance options. Start by learning about the basic types of life insurance: term life insurance and permanent life insurance.

Term life insurance often costs less because it covers you for a set time period, such as 10, 20 or even 30 years. You choose the time period and amount of coverage. If you die before the term ends, your beneficiary receives a lump-sum payment. You can often convert a term policy to permanent life insurance without taking another medical exam. Term life insurance rates are likely to be lower. Plus, it's typically easier to be approved if you are younger and in good health, so it's in your best interest to secure a policy at lower rates while you are a young adult.

Permanent life insurance policies are designed to last your lifetime with regular annual premiums, which are typically higher than term life insurance rates.

You should start your research by finding a good online life insurance calculator. The calculator will help you determine how much insurance you need to replace your income and keep your new family financially secure if you're not around to take care of them someday. Be sure to get information about insurance companies before you decide which one to buy from.

Courtesy of ARAcontent