How to Get the Right Life Insurance Policy—What to Know!

You’ve got your auto and homeowner’s insurance, and you might have coverage on your own life, too. But if you’re a new parent, chances are, you might not have enough life insurance.

A recent MetLife study revealed that about half of single men and women without children under the age of 18 have some life insurance. The number of married couples with insurance increases to 72 percent, but only an unsettling 75 percent of couples with children are covered.

But even those parents who have life insurance might not have enough an adequate amount of protection. “Your insurance should cover all your financial needs and all your financial obligations,” says Lynne McChristian, spokesperson for the Insurance Information Institute. That’s because, “you have people [your children and possibly, your spouse] who depend on you for income and financial support,” says McChristian. So what constitutes needs and obligations?

If you’re the breadwinner, your policy should be large enough to pay off any debt—think mortgage or credit card, for example—that you have accrued (the obligations). But it also should cover your needs, which are “what you think is necessary to let your loved ones to continue life as they have been accustomed to,” McChristian explains.

If you have a child, needs include any child-rearing costs, such as childcare, music lessons, and education costs. Plus, if having your child attend college is a goal of yours, then you need to include that staggering amount as well: reports tuition and fees alone for four years at a public university cost $37,800; for a private college, the price jumps to $127,100. And that’s only for one child. If you have multiple, you need to calculate the costs of all these items total.

To make sure that you have enough life insurance, McChristian recommends reviewing your insurance annually and adjusting the coverage if need be. If you don’t have a policy—but should—contact your auto or property insurer. “You have a relationship with them and it doesn’t cost you anything to use their expertise to ask for a recommendation for what you need,” she says. If you sign up for multiple policies through one company, you could land a discount.

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Ashley Tate is the money editor at Real Simple, a women’s lifestyle brand that focuses on making life easier.