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No one wants to think about what might happen to their family in the event of a tragic loss, but having a plan in place to protect your loved ones can offer much-needed comfort. Life insurance can offer your family a financial safety net in the event that you are no longer able to support them.
Parents of young kids don't always consider life insurance, but it's something that most financial experts highly recommend. "Life insurance is crucial for parents because it provides financial protection for their family in the event of their untimely passing," saysSusana Zinn, a mom and independent life insurance agent based in Miami, Florida. "It ensures that the family's financial needs, such as mortgage payments, child care expenses and education costs, are covered even when the primary breadwinner is no longer there."
There are two main types of life insurance to choose between: term life insurance and permanent life insurance.
Term life insurance provides coverage for a distinct time period — usually 10, 20 or 30 years — and pays out the benefit if you pass away during the term, Zinn says.
Permanent life insurance guarantees coverage for your entire life, and the cash benefit grows over time. Overall, permanent life insurance tends to come with a higher price tag than term life insurance.
There are also two subsets of permanent life insurance:whole and universal. Whole life insurance generally offers consistent premium prices and a flat fee your loved ones receive upon your death. Universal life insurance has more flexibility in terms of premium payments, but the final payment received upon your death isn't guaranteed and may depend on how much you paid in premiums.
Here's what to look for in a policy, how to pick the best insurance carrier and our top picks for life insurance for families.
How we chose the best life insurance companies
I consulted with two financial experts to help select the best life insurance for parents:
- Dennis Shirshikov is an expert in finance and retirement planning; he's also a professor of finance, economics and accounting at the City University of New York.
- Susana Zinn is a mom of two children, a grandmother of four and an independent life insurance agent based in Miami, Florida.
Both experts recommended that parents pick life insurance plans from reliable companies with strong reputations and financial ratings. They also emphasized that the companies should have stellar customer service and affordable rates. These are some of the qualities that guided my search.
Best life insurance companies
Ready for some detailed info about life insurance companies and policies? Each of these companies is financially strong, is known for top-notch customer service, and has policies that align with the needs of young families.
State Farm
State Farm is a well-known, financially stable, reputable insurance company that offers term life insurance plans of 10, 20 and 30 years as well as two types of permanent life insurance plans: whole and universal. Term life insurance starts at $15 a month; information about permanent life insurance requires a call to an agent for a quote. Most importantly, State Farm ranks exceptionally high for customer service. In 2023, it was the highest ranked individual life insurance company for customer satisfaction,according to J.D. Power.
Pros
- You can convert term plans to permanent plans, though there may be additional costs
- The fees for term life insurance are very budget-friendly
- State Farm has excellent customer service
Cons
- You must contact a State Farm agent to sign up for a plan
- Residents of Massachusetts can't access State Farm Life Insurance
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Northwestern Mutual
Founded in 1857, Northwestern Mutual is one of the oldest life insurance companies out there and is currently thelargest life insurance company in the U.S. Fees will vary, but you can sign up for term insurance periods of 10,15 and 20 years or choose from a large number of permanent plans, including whole life insurance, universal life insurance and variable universal life insurance (with different stipulations in terms of when and how the premiums increase and whether the plan changes as market values fluctuate). It is also one of the most highly ranked life insurance companies when it comes to customer service, withfewer customer service complaints than most of its competitors.
Pros
- You can convert term insurance plans to permanent plans down the line
- Northwestern Mutual is known for its excellent customer service
Cons
- There isn't a way to apply online; you must talk to a financial advisor to buy a plan
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Guardian Life
Guardian Life Insurance is a solid, financially stable life insurance company. You can get a quote for term policy online in just a few minutes. Guardian Life Insurance also ranks highly when it comes to customer service. In 2023,J.D. Power recognized the company for "outstanding" customer service. Term life insurance plans start at $42 per month for a 10-year plan and go up to $110 for a 30-year plan; you need to contact the company directly for term life insurance quotes, as rates for these vary from one person to another.
Pros
- Most policies allow you to convert from term to permanent life insurance
- Guardian Life is one of a few major life insurance companiesthat offers coverage to HIV-positive individuals
Cons
- You can get quick online quotes for term policies, but you need to speak to a specialist to buy a policy
- The website doesn't offer many details about coverage information
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MassMutual
MassMutual offers some of the least expensive term life insurance rates out there — term plans start as low as $9 to $10 per month, depending on your age and sex, and you can pick between 10-, 20- and 30-year options. Information about permanent plans (including whole, universal and variable choices) requires a quote from the company. MassMutual also ranks highly among its customers, withJ.D. Power ranking the company third in 2023 in terms of customer satisfaction.
Pros
- Most term life insurance plans can convert to permanent plans without additional medical questions or doctor appointments
- Term policy premiums are very budget friendly and may work well for families on tight budgets
Cons
- MassMutual doesn't offer online quotes
- The website can be challenging to navigate
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Bestow
If you are looking for a modern, user-friendly experience, Bestow is for you. This is the only company on the list that allows users to apply for term insurance online and qualify in just a few minutes. The website is easy to use and has an online chat function. Plus, the monthly premiums for life insurance are pretty affordable — Ten-year plans (available to people aged 18 to 60) start at $21 and 30-year plans start at $26.
Though the company is newer than the others reviewed, it's quickly gaining a positive reputation. Bestowranked first for Forbes' best insurance companies of 2023.
Pros
- You can quotes and apply for plans online
- Bestow doesn't require medical evaluation
- There's an online chat option for customer service
Cons
- You can't buy permanent life insurance from Bestow
- It's a newer, less established company
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How to choose the best life insurance for your family
If you're in the market forlife insurance as a new parent, you may feel uncertain about how much life insurance you need and which plan to get.
How much life insurance coverage should new parents get?
A good rule of thumb is to get a policy that is about 10 to 12 times your annual income, Shirshikov says. "But this can vary based on individual circ*mstances," he notes. "Parents should consider future education costs, daily living expenses, and any debts when determining the coverage amount."
What type of life insurance should new parents get?
For most young families, term life insurance is the best option, Shirshikov and Zinn state. "Term life insurance, offering coverage for a specified period, is typically recommended for young families due to its affordability and straightforward nature," Shirshikov explains. Term life insurance provides protection during times of financial vulnerability, including when you are raising young kids or making mortgage payments.
Permanent life insurance might be a good match if you're looking for lifelong coverage and are willing to pay higher premiums, Zinn says. But often, you can get a term life insurance plan that has the potential to switch to a permanent plan. "I recommend taking a term life insurance policy that is convertible, meaning it can be converted into a permanent life insurance policy in the future," Zinn says.
The bottom line
While thinking about what might happen to your family in the event of your passing isn't pleasant at all, picking out a life insurance policy doesn't have to be complicated. Consider policies that meet your family's budget needs, have good customer service, and come from reputable companies. Once you're covered, you'll likely feel relieved and more confident about your family's security.
Life insurance "isn't just about covering debts or funeral expenses; it's fundamentally about securing your child's education, lifestyle, and the unforeseen costs of growing up without a parent's income," says Shirshikov. "The peace of mind it offers cannot be understated, providing a clear path for financial stability even in the wake of tragedy."
FAQ
Should I get life insurance after having a baby?
It's a good idea for anyone to get life insurance, but when you're caring for a growing family, there is even more reason to consider it. Life insurance guarantees that your family will have financial protection in the event of your untimely death.
Can you put a newborn on life insurance?
Yes, children, including newborns, can be listed as beneficiaries on your life insurance plan, but experts suggest that you appoint a trust or a legal guardian to manage these funds until your child reaches adulthood.
How much life insurance should you have as a parent?
It's generally recommended that you get a life insurance plan that will replace about ten years of your income.
From the What to Expect editorial team andHeidi Murkoff,author ofWhat to Expect When You're Expecting. What to Expect follows strict reporting guidelines and uses only credible sources, such as peer-reviewed studies, academic research institutions and highly respected health organizations. Learn how we keep our content accurate and up-to-date by reading ourmedical review and editorial policy.
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