Life Events

Having a Child
Whether it's your first child or your third, the birth or adoption of a child or grandchild is an exciting time for the entire family. Along with a new child's arrival comes a host of financial concerns and responsibilities.

It's never too soon to think about saving for a college education
If you’ve just become a parent or a grandparent, the child’s college days may seem a long way off. However, the earlier you start saving for education costs the better. Over the past few decades, tuition for both public and private education has increased more rapidly than the general cost of living, far exceeding the overall inflation rate.

There are a number of ways to save for a child's education including: Education IRAs, State Sponsored Education Programs, Custodial Accounts, Uniform Gifts to Minors (UGMA), Zero Coupon Bonds, EE Savings Bonds, stocks and mutual funds.

Insurance
If something should happen to you or your spouse, would your child be protected financially? Life insurance helps to protect against the loss of income that would occur if you or your spouse were to die. There are a number of types of insurance that a family with a new child might want to consider:

Health Insurance
Health insurance is a necessity--especially if you have children. From cuts and colds to broken bones and more serious injuries...children sometimes seem to need constant medical care. Should you become disabled or seriously ill, health insurance can help protect your family from financial disaster.

If you are expecting a baby special concerns apply. Be sure to review the details of your coverage, what is and what isn't covered, length of hospital stay, choice of doctors, etc. Also be sure the baby is covered from the time of birth, and find out if your policy covers visits to a family practitioner or pediatrician after the child is born.

Adopting a child has it owns specific concerns. If the birth mother has no insurance, you may be asked to pay for prenatal care in addition to the costs of childbirth, so you'll need to find out if your policy will cover the birth mother.

Also be sure to understand your policy's provisions for any potential medical problem your adopted child might have. If you are adopting an older child, you should find out when coverage begins.

Life Insurance
If you already have life insurance, the birth or adoption of a child is a good time to review your coverage. If you don't have life insurance, it is time to learn more about how it can help protect your family in times of need.

Your premature death could significantly affect your child's future. An addition to your family will generally increase your need for life insurance coverage because of the increased expenses and the potential changes in your financial goals and priorities.
Your life insurance needs depend on:
• Your marital status
• The number of children and their ages
• Your income and debt level
• The value of your assets
• Your financial goals
Keep in mind that you must continually reevaluate your life insurance as your family grows.
In two-parent households both partners are generally dependent on each other financially. Life insurance can provide income to the surviving spouse and allow your family to maintain its standard of living.
If your family has one wage-earner, that spouse's death may certainly cause hardship for the surviving family members. Just as important, the death of the stay-at-home spouse could also result in financial hardship because of costly daycare and housekeeping expenses. Both spouses should have enough life insurance coverage to adequately cover all expenses that could potentially result from their death.

Disability Insurance
You should consider the financial effects if you became ill or injured and were unable to work either for a prolonged period of time, or permanently. Disability insurance is one way to protect your family from financial disaster should you become sick or injured and lose your income. Most disability policies pay a benefit replacing generally 50 - 70% of your earned income while you are unable to work.

Your Estate
If you don’t already have one, the birth of a child is a good time to make a will. While we don’t like to think about it, dying is inevitable. The best time to think about your estate plan is now.

If you have additional questions on this subject or would like to discuss your own situation, contact a financial professional today.

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