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For new and soon-to-be moms, this mother’s day was a particularly special occasion. In a sea of firsts, this Sunday is a day for celebrating the new adventure you’ve just embarked on or will soon be embarking on.

But being a new parent also comes with new challenges, and it probably feels like there are more priority items on your list than ever before, as major life events have a way of focusing our attention in a new way.

One of those areas coming into sharper focus may be your financial picture, and the need to protect your people in the event that you are no longer there. That’s where life insurance comes in, and is likely one of those items already on your list.

Whether you’re a new mom, soon-to-be mom, or thinking about becoming a mom, it’s never too early to start thinking about life insurance. Ladder makes it easy for moms like you to find the right life insurance policy.

1. Which kind of life insurance is right for new moms?

In general, life insurance policies come in two forms: “term life” and “permanent (or whole) life.” With the former, you choose a period of time (i.e. 10, 20, or 30 years) during which you will pay monthly premiums and receive coverage for a given amount that, should you die within this period, will go to your beneficiaries. Conversely, “whole life” is an open-ended contract with no expiration date: if you keep paying in, it will cash out whenever you die.

If you’re a new mom, you’ll likely want to give term life a closer look for several reasons.

Cost: Term life is generally cheaper than whole life (3-10x less expensive). While whole life offers a cash value, this can be an expensive way to save money, because of commissions paid on the premium and other built-in costs. 

Transparency: It’s relatively easy to figure out the appropriate term length—typically 10 to 30 years—if your goal is ensuring your children receive support until they’re financially independent. 

Control: People who want more control over their life insurance and investments might prefer a “buy-term-and-invest-the-difference” strategy vs. a whole life insurance product. This gives you the ability to change your investment strategies when you want, so you can use the money you saved by choosing term life insurance instead of whole for other purposes, as you see fit.

Flexibility: Typical term life insurance can be limited. In most cases, you select a policy and you’re essentially locked into it for the duration of your term. That means you have to determine what your family and financial picture will look like over the next 10, 20, 30 years. If that feels hard to do, that’s because it is! Our lives are constantly changing (maybe you pay off your mortgage faster than expected or move to a city with a lower cost of living), and our coverage should be able to change too. That’s where laddering, or flexible term life insurance, comes in. Ladder gives you the option to instantly decrease your coverage over the course of your term life policy, which decreases your premiums by the same proportion—all with a few clicks online or taps in the app. You can also easily apply to increase your coverage online if your circumstances change and you want more coverage. There are no fees, paper forms, or calls from commissioned agents to get it done. 

Staying on top of your life insurance needs is a smart way to save money over the years while keeping your loved ones covered.

2. What if your partner already has life insurance?

We’ve been talking about why new moms should consider life insurance, but many people may be wondering if their own life insurance policy is even necessary if their partner already has one.

Whether you and your partner are both working or one of you stays at home, you should both consider getting life insurance. That’s because you both contribute financial support to the household and the standard of living of your family. This includes stay-at-home parents! estimates that the median annual salary for all of the jobs that stay-at-home moms (and while the survey didn’t include them, it’s worth noting dads, too) perform is $178,201. If anything were to happen to the stay-at-home partner, all of this non-salaried work would have to be provided by some other means, and a second life insurance policy will go a long way towards maintaining your family’s standard of living.

3. How much coverage do new moms need?

Perhaps the easiest way to estimate your life insurance needs is to use a free calculator online. If you want to break it down further, how much you should buy really depends on your goals and budget. In the end it’s all about figuring out how much risk you can afford to take off the table.

One popular method for picking your term and coverage amount is based on the simple but powerful idea of replacing your income. There are two main steps.

Pick your term. How many years until you think you’ll retire? That’s your term. The reason why is that until then, you’ll most likely have people counting on your income (for example your spouse/partner and/or kids).

Pick a coverage amount that’s equal to your annual salary multiplied by your term. So for example, if you make $100,000 a year and have 20 years left until retirement, pick a coverage amount of $2M. If you have 30 years left until retirement, adjust accordingly.

If the quote fits in your budget, that’s great news. It’s always better to avoid cutting corners.

If money is tight, however, it’s important to identify two things before buying a policy.

What’s your goal with the policy? Your goal of the policy should highlight which financial liabilities are a priority. For example, it could be a mortgage, a few years leeway for rent, or your child’s college education. You prioritize what’s most important for you and your family. 

What’s realistic for me and my family’s budget? Before you accept your policy, you’re able to view different term lengths and coverage amounts. And if you get your quote from Ladder, non-commissioned agents are available to help you find the best option for your budget.

4. How much coverage do you need if you’re a stay-at-home mom?

Figuring out your coverage amount might feel a bit more challenging if you don’t take a traditional income. While there is no single approach that works for everyone, factoring in the size of your family and the value of the work that you do in terms of dollars (i.e. how much would it cost to hire someone) is a good place to start. 

This is another point for laddering—if your family is growing, you can take out the policy that’s right for you right now with the option to apply to bump up coverage whenever you need.

*About the Author

Liana Corwin is the Director of Communications and Editor of the Financial Literacy Blog at Ladder, an award-winning insurtech that’s using technology to make life insurance smart, easy, and affordable. Passionate about helping consumers, Liana has spent nearly a decade working with brands that solve hard problems and make consumer experiences delightful.