Have you ever wondered how much you need to leave to your children to make sure that they are cared for in the way that you would want them to be if anything should happen to you?
The U.S. Department of Agriculture estimated that the average cost of raising a child born in 2013 up until age 18 for a middle-income family in the U.S. is just over $300,000 when adjusted for inflation. That’s per child, so if you have multiple children, multiply that figure accordingly.
That figure also does not include the cost of college. Using an online calculator, I estimated that college expenses for a child born in 2013 for a 4-year program are estimated to be a whopping $192,175 for an in-state public college or $378,346 for a 4-year private college.
Then consider whether there are other expenses you wish to factor in such as private schooling, future wedding expenses, a down payment on a first home, or similar.
Now don’t panic if you don’t have that much in savings! That’s why many parents take out life insurance. Total up your current assets and this will help you determine how much life insurance you might need to fill the gap.
Also, consider purchasing your life insurance privately rather than purchasing additional coverage through your employer. While the rates through your employer’s plan might be appealing, if you ever leave the company (voluntarily or involuntarily), you’ll be stuck having to purchase a new policy and life insurance generally gets more expensive as you get older, so better to start off with a private policy right from the start that’s not tied to your employer.
Free Guide for Parents with Minor Children:
If you have minor children, make sure you check out our free guide, on Children's Safeguard Planning, that covers the unique issues involved in estate planning when you have minor children, including naming guardians and protecting their future. Or, contact us to discuss the best way to get started at 919-443-3035 or via our contact form.
