Doing just about anything as a brand new parent is, well, tough. My youngest child is just over a year old. And the last year has been one of remembering, “Oh, yes, this is what it’s like to have an infant.”
Between sleep deprivation and dirty diapers, who has time to do things like shop around for life insurance? But life insurance is more important now than ever. So we’ve done some of the shopping around for you!
In this article, we’ll discuss specific life insurance companies and products that might work for your growing family. We won’t dive into issues like how much life insurance you need or why you need to be insured even as a stay-at-home parent. Click the links to check out those topics if you’re unsure of how much insurance you actually need.
Instead, we’ll talk here about different companies and products that might be of interest to you as a new parent. A 2015 Bankrate survey showed 37% of families with children under 18 don’t have any life insurance. And 32% of the ones that do have $100,000 or less in total coverage.
Those are truly scary statistics for our families and children. Don’t let your family be one of the unprotected ones. Use this quick guide to find easy-to-shop-for, affordable life insurance coverage for your family.
One quick note: I’m going to focus on term life insurance here. Whole life insurance is appropriate for some families, but not most. It’s a much more complicated, expensive product that’s just not the right fit for most new parents.
Our Top Pick
My current favorite option for life insurance is Haven Life Insurance Agency, issued by MassMutual or its subsidiary C.M. Life. They win the top spot for new parents, especially, because they make shopping for term life insurance ridiculously simple and quick. You can get your application in during those 10-minute newborn naps.
Haven offers medically underwritten term insurance. This means you do have to go through the hassle of verifying your medical information. It takes a bit more time. But that typically results in lower premiums.
When an insurer can verify that you’re in generally good health, you’ll pay less each month for your term policies. And that’s definitely a good thing. Haven also lets you do a quick estimate of how much you might pay for life insurance. If you’re still wavering on whether or not a policy will fit your diapers-are-so-expensive budget, use this tool before you actually apply.
Haven Life also offers a variety of term options, so you can suit the term to your needs.
MassMutual and its subsidiaries have great customer service ratings and a solid financial rating, as well. That means your policy is safe with them.
Our runner-up for best life insurance for new parents is State Farm. Sure, they’re more of an old-school company. Their online interface isn’t as slick as Haven Lifes. With that said, State Farm makes it really easy to shop for different types of life insurance or to add riders to your policy.
For instance, you might decide to add a small policy rider to insure your child. State Farms interface also lets you easily compare different policy types and amounts. You can also look at specialized types of term insurance, including Return of Premium and Instant Answer term. The Instant Answer option lets you get approved more quickly, which is helpful if you need some coverage right now.
If you think you’re interested in a permanent life insurance policy, State Farm allows you to compare one to a term policy directly.
Once again, State Farm has excellent customer service ratings and great financial ratings, as well.
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Our Selection Methodology
So how did we land on this list of excellent life insurance options for new parents? One big factor is the ease of online application. Since you’re so busy right now, I know it’s important to be able to apply quickly online. Even if you have to take a few follow-up steps, getting that first step done quickly online gives you some momentum in the process.
Note that many companies will offer online quotes only through quote aggregator systems. So you might find a quote from, say, SBLI, in an online aggregator. But they won’t give you a direct quote from their website. You’ll have to actually receive a phone call and finish your application to get a quote from the company itself.
I also looked at things like the types of policies offered. It’s important to be able to compare different policy amounts and terms so you can find one that suits your needs and budget. And I looked at the individual company’s financial ratings. You should never buy life insurance from a company with a less-than-great financial rating. That’s just asking for a policy that the company can’t pay out when the time comes.
When shopping around, I ran the numbers for a 32-year-old female in good health. I looked at $200,000 policies and various term lengths. Obviously, pricing was also a consideration.
1. Haven Life
I’ve already sung Havens praises. But know that it’s backed by MassMutual or its subsidiary C.M. Life, which has great financial ratings. The online application does take a bit longer than some others. It’s more detailed with questions about your medical history and even driving history. But that means you’ll have to do less follow-up work to actually get insured.
Haven Life had some excellent potential rates, especially if you’re in excellent health. My estimates came back between $18 and $27 per month for a $250,000 policy--and that’s with average health.
2. State Farm
Like I said above, I like that State Farm lets you easily compare and contrast different policy options during the application process. It’s very convenient. And the company has a history of paying out policies easily and on time, and its got great financial ratings. They also have a handy calculator to help you figure out how much life insurance you need in the first place.
State Farms policies came out a bit more expensive--between $27 and $42 per month, depending on the term. Still, that’s not a huge premium to pay for good service and financial ratings. Return of Premium policies were between $95 and $97 per month.
3. AIG Life
AIG Life is typically on the lower end when it comes to costs, which is a good thing. They have good financial ratings and an easy way to submit a claim online. This can make things easier for your family should the worst happen.
You can apply for a quote online with AIG, but they’ll have to call you with the actual rate for your policy. It’s still a fairly simple process, though.
Prudential has been around for a very long time, and it has an A+ financial rating from A.M. Best. Its online application system lets you shop around for different terms, so you can easily compare premiums. You can also shop for various riders, including an option that lets you cash in on some of your benefits during life in the case of a terminal diagnosis.
Prudential’s premium came out about average with others--$24-$30 a month for $200,000 of coverage for a 32-year-old, non-smoking female.
This company has excellent financial ratings, so you can trust that your policy will be paid out. You can do a quick application online, and then a representative will call you back to actually finish the application and get your quotes. They do offer a variety of coverage amounts and flexible terms, so you can customize your life insurance to meet your needs.
6. Fidelity Life
If you’re concerned about the outcome of a medical exam, Fidelity Life has a couple of guaranteed issue insurance policies. You can get these on the strength of your medical history given online, rather than an exam. They’re more expensive policies--$14 to $25 for a $100,000 policy, according to my quick quote. But they can be a helpful option in certain situations.
Their online application isn’t a full quote. It just gives you a quick quote, and then you have to fill out the complete application and wait to talk to a representative.
Busy new families who want to expedite the process online--Haven Life wins hands down if you’re looking for a system to actually get a life insurance quote and complete most of the process online.
Those with medical issues--Fidelity Life offers guaranteed issue policies of up to $350,000. This is a higher coverage amount than many other companies offer as part of a guaranteed issue. If you’re concerned that health issues will preclude you from getting term life insurance coverage, consider this option.
Families with unique insurance needs--State Farm offers flexible terms--more so than Haven Life--and a bevy of riders to choose from. If you want a unique policy tailored to your exact needs, start your shopping with State Farm.
Factors to Consider
Shopping for life insurance doesn’t have to take forever or be incredibly difficult. Just keep the following factors in mind as you shop around:
- Ease of Application: Spending hours applying for life insurance and making medical appointments to get it is no good when you’re dealing with a new baby at home. That’s why ease of application was at the top of my list when creating this review.
- Available Options: You don’t really need to shop with an insurance company that offers 10 different term lengths. You just need to find a provider that offers the term and coverage amount you need. If you really need 20 years’ worth of coverage, don’t opt for 15 just because that’s all the insurer in question offers. Find another insurer who will offer what you need.
- Financial Rating: Always check out the current financial rating of the company in question. Don’t opt for a company with a rating that’s less than stable. That’s just asking for your potential future claim to not be paid out because the company has gone under.
- Cost of Coverage: Paying for really cheap coverage from a poorly-rated company isn’t a good idea. But once you’ve narrowed down your choices to a handful of reliable companies, coverage costs are important. You want to be sure you can actually afford the coverage in question month after month. Remember, you’ll lose your coverage if you let your policy lapse. So be sure you can pay for the policy even if times get tough.
Comparing multiple policies at once.
Online aggregators make comparison shopping easy - two that have life insurance are Policy Genius and Sproutt.
A service like Policygenius provides a lot of value in aggregating the available insurance options and presenting you with the best possible quote. Policygenius does the legwork while you take care of the important things, like the tiny people you’ve brought into this world. You can get fast quotes, compare rates, and find the best policy that ensures your children are always covered.
If your family places a high priority on health, Sproutt may be your best life insurance shopping platform. Like Policygenius, Sproutt can help you shop multiple insurers in minutes. But what makes Sproutt unique is that it really wants to reward you for making healthy choices. Its Quality of Life Index (QL index) looks at five factors: movement (exercise), sleep, emotional health, nutrition, and balance. The higher your QL Index score, the more you may be able to save!
Shopping for life insurance as a new parent can feel overwhelming and even a little scary. After all, it’s coverage that you’ll never use unless you pass away while you’re children are still young. And no parent likes to think about that possibility.
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However, you’re now responsible for a life other than your own. And you need to be sure you can continue to provide and care for your child should the worst happen to you. That’s why having life insurance as a new parent is absolutely essential.