Congratulations! You’ve just had a new baby. As a parent, you never want to think of something bad happening to your son or daughter, but it’s a good idea to prepare for anything that might happen. What types of insurance are worth looking into?
1. Critical illness insurance
Critical illness insurance for children is one of the “must haves” on the list — it covers any expenses you would have should you need to quit work and care for your ill child. Likewise, if you or your spouse fall ill, critical illness insurance policies taken out on you will help cover household expenses affecting your kids.
Developed in the late 1990s, the insurance industry developed critical illness insurance as a product to provide policyholders with a tax-exempt, lump payment in the event the insured is diagnosed with a qualifying critical illness.
According to the American Association for Critical Illness Insurance, “some 600,000 Americans now have this protection purchased on an individual basis or through a plan offered by their employer.”
This emergency cash infusion is a lifesaver to families in crisis. Here are just a few ways critical illness coverage can help yours:
- Pay fixed household bills, from mortgage and car payments to insurance premiums.
- Helps pay for medical treatments not included in your health coverage.
- Do you need to travel for specialized treatments? Use the cash benefits to fund fuel, hotel, and meals.
- Has your family crisis impacted your income? Help make up the difference in lost wages when you or your spouse need to stay home to care for your child.
- Has your health plan refused promising but experimental treatment? Your critical illness coverage can help cover the costs.
“My husband’s cancer obviously threw our family into a whirlwind,” said Kim V., a parent of two young boys. “All our focus went into making Bill comfortable, making the most of his time with our sons, and doing what he can to help Bill beat the odds.” Bill lost his fight after two difficult years, but his family thanks their supplemental coverage. “Having the extra funds allowed me to normalize our lives as best as we could, under the circumstances,” said Kim. “We could fly out my mom to help around the house, and I could take time off work to care for Bill.”
2. Disability insurance
How will your family cope with lost future earnings if you or your spouse lose their ability to perform their job? Disability insurance, also known as disability income insurance, covers individuals in the event accident, injury or illness restricts or inhibits their ability to earn an income. Disability insurance helps bridge the gap in income loss until the insured recovers or help pay for training so the insured can seek an alternative career.
“I had a very physical job as a boat mechanic, and when I lost the use of my legs, there was no way for me to navigate the small spaces below deck,” said Bill V., who used to contract for fishing boats out of Sitka, Alaska. After an ATV accident severed his spine, he learned to adapt to his new life but recognized certain limitations required him to make some tough decisions.
“I have to protect myself against frostbite since I can’t feel when my legs are cold, so I knew I needed to find an indoor job, but I didn’t want to leave the industry altogether. My disability coverage allowed me to get specialized training that builds on my knowledge of boat mechanics, and I was able to learn how to design and fabricate parts using 3-D printing. Because my family was covered through disability insurance and a decent medical plan, we didn’t burn through our reserves during the transition.” Bob put his past experience, his new training and his industry connections to good use, and has been instrumental in the success of a custom manufacturing startup.
3. Accidental injury insurance
Riya P. is a single mom and self-employed real estate inspector. When Riya badly broke her ankle on a weekend hiking trip with her girlfriends, she spent six weeks out of work while recovering from surgery. Her accidental injury insurance helped pay for childcare while she went to physical therapy, and made up for lost income. “I couldn’t crawl under houses and onto rooftops with six pins in my ankle,” said Riya. “I burned through my rainy day fund pretty fast, and the policy saved my backside.”
Accidental insurance coverage helps fill the gaps left by other types of insurance. Likewise, accidental injury policies assist parents when their injured kids need them by their side. Accidental injury insurance coverage includes:
- Emergency care and surgery
- Ambulance transport
- Prosthetics and fitting appointments
- Prescribed medical equipment
Are you an active family? Are you planning to raise an adventurous child? Regardless of your family’s lifestyle, you might want to look into accidental insurance to cover gaps in auto insurance, homeowner policies or your family’s health plan.
4. Life insurance policy
Do parents take out insurance policies on their children? Some do. While most children aren’t income-earners, funeral expenses and uncovered expenses remaining after an illness deeply affect grieving families.
Most new parents consider purchasing life insurance to protect their spouses and children in the event either or both parents die. How will your life be affected if you need to take on the expenses and responsibility of single parenthood? You may have appointed a caregiver for your child in the event you and your spouse die at the same time, but how do you help support your child’s new custodian?
Ask your agent about the two main life insurance types. Permanent life policies pay out upon the death of the actively insured, whether that person is 29 or 92. Term life is less expensive and covers the insured for a specific period of time, generally 20 or 30 years when purchased to help support growing families.
“When my brother and sister-in-law and their youngest child died (in an auto accident) I didn’t think I’d have been able to look after their older kids if it weren’t for their life insurance,” said Sheri W., herself a mother of two. “My husband and I were able to relocate to a larger home, plan for Blaine and Cleo’s college and help them get the counseling they needed, on top of all the other things associated with living a normal life. Their parents made sure my own kids’ lives wouldn’t be impacted, and that made a huge difference to all of us.”
Let Emerge help protect your family
Parenting is an adventure we embrace, knowing the risks involved. Will our kids be happy and healthy? Will we pass on the lessons they need to be compassionate, loving individuals?
We do the best we can, with what we have, knowing some things are beyond our control. When we’re not able to be their guides, we can still support them with supplemental insurance.
Emerge specializes in insurance products designed to protect you and your family from the “worst-case” scenario. Let us help you answer your supplemental insurance questions, and guide you to a plan to protect your family’s financial interests.