Young families should evaluate their life insurance needs

While many young people might not see much need for having life insurance – they tend to be fairly healthy, after all, and no one likes to think about potential accidents – those with children have a particular need for this kind of coverage in their lives, according to a report from the Boston Herald. This is true even if they don't necessarily think it is, because many Americans may not properly value themselves or all they do that helps to provide financial value for their families.

What does this mean?
For instance, most people would concede that it's important for parents to replace the income they might lose in the event of a tragic incident or illness, the report said. The loss of those making $50,000 annually in their jobs would obviously be a significant one for young families that are trying to care for children of any age, but this is also true of stay-at-home parents who don't work outside the home, but whose contributions to the family are financially valuable nonetheless.

The cost of child care almost every day of the year is significant, and if one parent has opted to stay home with the kids, that's a service that would need to be replaced – and which carries a big price tag, the report said. As such, stay-at-home parents need to have life insurance policies in their names, so that their families can adequately replace the services they provide, even if they don't think of them as having an actual dollar value.

Young families probably have more need of life insurance than they suspect.

Finding the right coverage
In addition, one of the major impediments to buying the right kind of coverage is that people largely do not know enough about or fully understand their options and what each one ought to cost, the report said. Indeed, studies show that consumers tend to dramatically overestimate the cost of life insurance coverage – sometimes as much as double the actual monthly premium – mostly because they don't understand there are more affordable options available, such as term life insurance that can simply cover the period of child-rearing or until retirement.

Because of this, it may be important for life insurers to work on various methods to educate younger consumers about the various ins and outs of life insurance coverage. Doing so effectively could  help improve the financial security of young families for many years to come.