A new baby also means another person depending on your income. Life insurance is designed to replace that income if something should happen to you. As hard as it is to think about, it's really an act of love to make sure your children are financially protected in case of the unthinkable.
It's a common question. How much life insurance is enough? Well, it depends on several factors including your assets, your debts and more. One way to help you figure out a good starting figure for coverage is to:
1. Estimate what your family's monthly expenses would be.
2. Add in your mortgage balance and other debts.
3. Add in estimated future expenses such as funeral expenses and college tuition.
Once you have that figure, subtract out Social Security benefits, other life insurance policies, your spouse's income, and retirement plan benefits. This will give you a good idea of the minimum coverage needed to provide financial relief for your family.
Don't just buy the first life insurance policy you get a quote on. It's important to do some comparison shopping to make sure you're getting the best value for your situation, because life insurance rates vary between life insurance companies. You want to get at least three different quotes to compare against each other.
You may already have a life insurance policy from your employer. That's good but you still may want to add to that once your child is born by increasing the coverage or taking out an additional policy. You probably can find a good value on additional and affordable life insurance just by shopping around.