Insurance you might think about if you have kids

It’s almost open enrollment season, which means it’s time to ask yourself whether you want to sign up for any of the insurance packages offered through your employer. Evaluating insurance policies for yourself can be difficult enough — but if you’re a parent, the process of choosing insurance options becomes even more complex. Should you enroll in your employer’s dental, vision or life insurance plans? How can you decide which insurance packages are best for you and for your family? Is there specific insurance for kids that you should consider?

“Selecting insurance is risk management,” says Emma Leigh Geiser, a personal finance coach who writes about finance and healthcare at Nurse Fern. “You can’t go back and get insurance retroactively.” Geiser suggests that before you begin evaluating the various insurance packages available through your workplace, you should ask yourself which supplemental insurance policies make the most sense in your life. “Do you have family members who wear glasses? Are you prone to cavities?” Knowing what types of insurance you might need will help you choose the policies that are most likely to benefit your family.

Geiser also advises parents to make sure they understand exactly what each insurance package covers — and to ask questions if anything is unclear. “If you have questions, make sure to ask your benefits representative for clarification. There is nothing worse than assuming you have coverage and finding out you don’t in a time of need.”

With that in mind, let’s take a look at some of the most common types of insurance offered during open enrollment — and why you might want to think about taking advantage of these benefits if you have kids.

Health insurance

Health insurance tends to be on most people’s “must-have” list — but that doesn’t mean that most people know how to compare health insurance plans or choose the best plan for their family. Eric Roberge, CFP® and founder of Beyond Your Hammock, suggests that parents evaluate health insurance plans based on the following factors:

• Premium cost
• Deductible
• Out-of-pocket maximum
• Access to flexible spending accounts, health reimbursement accounts, and/or health savings accounts. (If you don’t recognize these terms, read Haven Life’s guide to FSAs, HRAs, and HSAs.)

That said, comparing these kinds of factors side-by-side isn’t always going to give you the information you need to make the best choice in finding the right health plan. You also have to ask yourself which factors are the most important to you and your family. Are you willing to take on a high-deductible health insurance plan so that you can take advantage of the tax-deductible savings opportunity offered by a health savings account? Do you need your health plan to cover specific doctors or prescriptions? Are you simply looking for the health coverage with the lowest monthly premium?

It’s also a good idea to think of the way your health insurance coverage could affect your family not only this year, but over the long-term. “The best [health insurance] plan will enhance your protection planning, and could potentially provide an avenue for long-term asset growth if you can leverage something like a health savings account,” says Roberge. If you can find a plan that gives your family the health coverage you need at a price you can afford and allows you to save for the future, that’s a win-win.

Life insurance

Life insurance is another “must-have” insurance policy — but if you already have an affordable term life insurance plan in place, you might not need to sign up for the supplemental life insurance plan offered by your employer. “Most parents can skip the supplemental life insurance from their employer, unless you have pre-existing conditions that makes getting life insurance coverage an issue,” says Betty Wang, CFP® and founder of BW Financial Planning.

If you are concerned that your health might prevent you from accessing the type of life insurance plan that requires a medical exam — or if you’re feeling uncomfortable with in-person exams due to the COVID pandemic — you should know that there are no-medical-exam term life insurance plans available, and they might offer better coverage than your employer’s supplemental life insurance plan. As with all insurance policies, it’s important to compare your options before making a final decision.

If you haven’t yet begun the term life insurance application process, a supplemental life plan could keep your family covered while you shop around for a term plan. “Supplemental life insurance can be a band-aid until you get the coverage your family would need if something happened to you,” Wang says.

That said, eventually you’ll likely want to make the switch to term life insurance. “For life insurance, as a baseline we usually suggest getting term life insurance coverage that is 10x gross income,” Roberge says, “although there are some unique situations where some kind of permanent life can make more sense.” Haven Life has a guide to the differences between term life insurance and permanent life insurance, if you’re curious about which type of policy might be best for your family.

Dental insurance

If you’re a parent, you’re probably going to prioritize dental insurance for your kids — especially if they’re at the braces-wearing stage — but it’s also important to prioritize dental insurance for you. “Dental insurance is a must,” Wang explains. “The purpose of going to the dentist is not just to have clean, perfect teeth. It’s for your long-term health.”

A good dentist doesn’t just check your mouth for cavities. Dentists also perform initial screenings for oral cancer and may recommend additional tests if they find suspicious lumps or growths. Plus, dentists are often a first-line defense against other health issues that could affect not only your mouth, but your entire body. “Studies show that gum disease may increase your risk of other health complications, including stroke, diabetes and heart disease,” Wang reminds us.

If you can afford dental insurance for yourself and your kids, sign up — and don’t skip your biannual checkups.

Vision insurance

Kids need regular eye appointments for two reasons. First, to ensure that their eyes are as healthy as possible. Second, to confirm that if they require corrective lenses, they get what they need to do well in school, at sports and at home. What about parents? “I don’t feel as strongly about vision insurance for parents,” Wang says. If your employer offers reasonably priced vision insurance, you might want to consider getting insurance for yourself — but it might be okay to just get vision insurance for the kids. (Note, however, that some employers only offer vision plans for the whole family, rather than a kid-only option.)

Whether to get vision insurance for yourself really depends on your own eye health — and whether you’re likely to need more than an occasional prescription update. “I often skip supplemental vision benefits as I don’t have any vision problems and my basic insurance covers glasses,” Geiser says. If you have a family history of glaucoma, on the other hand, you may want to prioritize vision insurance.

The other reason to consider vision insurance for yourself? It might encourage you to be proactive about your own health, and that’s the kind of self-care that could benefit the entire family. “Parents need to take care of their own health,” Wang advises. “If knowing they are paying for dental and vision insurance encourages them to make appointments, then that is a benefit.”

Disability insurance

Many employers offer two types of disability insurance: short-term disability and long-term disability. Some parents may want to sign up for short-term disability insurance if they plan on having another child in the next year, since short-term disability policies often cover a percentage of the income lost during maternity leave. Other families might not need short-term disability coverage, especially if they have a robust emergency fund. “Short-term disability is often not needed if you have enough emergency reserves set aside to cover 3-6 months of your regular expenses without an income,” explains Roberge.

What about long-term disability insurance? Roberge thinks it’s worth considering, particularly if (like most parents) you’re in the prime of your career. “It’s the extended disability that could last until retirement that would have the biggest impact on your financial life,” he told us. “If you make $X per year, multiply that by 20 or 25 years — that’s how much income you give up if something happened where you were no longer able to work. This is where most people need the additional coverage of a disability insurance policy.”

Take a close look at your employer’s disability insurance programs and learn how to understand the benefits disability insurance offers. Then ask yourself whether you want to include short-term or long-term disability insurance in your protection planning.

Pet Insurance

If you bought a quarantine pet for the kids, you might be wondering: Is pet insurance worth it? It depends. “If I just got a puppy and don’t have savings to cover a pet emergency, I may want to consider the costs and benefits of pet insurance,” Geiser explains. Some people prefer to set aside a little money for veterinary expenses every month, or to cover any unexpected pet healthcare needs out of their emergency fund — but other families appreciate the additional security offered by a good pet insurance plan.

If you’re not sure where you stand on the idea of pet insurance, Wang suggests asking yourself whether you want to have the ability to pursue major medical interventions for your pet. “Are you going to spend $10,000 for surgery if Odie has hip dysplasia or $20,000 for chemotherapy if Garfield has cancer? If your answer is ‘yes, absolutely,’ then you need to get pet insurance with some coverage.” Keep in mind the cost of not pursuing medical interventions includes making your children aware of Fido’s fate — a not-insignificant thing to keep in mind when considering pet insurance.

While we’re on the subject of pet care: You can’t make your pet a life insurance beneficiary, but you can set up a trust to ensure that your pet is taken care of after you’re gone. Since open enrollment season is about making sure that you and your family members are protected, consider setting aside some time to make a will, create a trust, rebalance your budget or take care of any other outstanding tasks that will help ensure the safety and security of your loved ones (including your kids and your pets) no matter what happens to you.

Because taking care of each other is what families do.