Married With Children

Taking advantage of two incomes makes raising a family much easier

vary, most couples should have six to 10 times their annual income in life insurance.” A couple with a $100,000 income, for example, might want $600,000 to $1 million in total coverage.

Employees can often purchase additional coverage through their company at an attractive price. “That insurance may be tied to the company,” Peace points out. “You might leave your job and have a difficult time replacing the coverage because your health has deteriorated.”

Therefore, Peace generally recommends shopping for supplemental coverage on your own, outside of what your employer offers. “You can buy a portable policy,” he says, “one that you can take with you as you go through your career.”

Life insurance policies generally come in two varieties: “term insurance,” which is pure protection, and “permanent insurance, whole-life insurance,” which includes an investment account, commonly called the “cash value.” As people grow older and the cost of pure insurance increases, the cash value can be tapped to help pay the rising premiums.

“Term insurance is much less expensive than permanent insurance,” says Alan P. Weiss, a certified financial planner at Regent Retirement Planning, in Woodbridge, Connecticut, who advises Keith and Dawn Kountz. “Although permanent insurance is appropriate in some situations, many couples with young children are better off with term insurance. They have so many financial needs that they can spend only so much on life insurance; term insurance allows them to get the most coverage for the money they spend. Today, many parents choose 20- or 30-year term insurance, so they lock in a fixed price for the years when their children are dependents.”

HOUSING
Couples with children must provide a home that will accommodate a growing family. That may be a stretch in areas such as California and the Northeast, where housing prices have gone through the roof. In Brooklyn, New York, Darrell Oliver, 35, a public relations executive, recently bought a four-bedroom “fixer-upper” where he’ll have plenty of space for his wife, Kendall, 34, a school teacher, and their two young children.

“Altogether, the cost of the home may wind up to be around $400,000,” says Darrell, “with as much as $150,000 in renovations. We were able to get one mortgage loan for the entire amount, which saved on closing costs.” Homes in the neighborhood are currently appraised at around $550,000, on average, he says, so the Olivers expect to have substantial equity in the house after the process has been completed.

Innovative mortgage alternatives may also help couples with children climb the housing ladder. “We recently moved into a larger home,” says Deborah Wilson. “We took a seven-year, adjustable-rate mortgage; it had a low rate of 6.78% that enabled us to get more space for our money.”

With Deborah taking a new job and their 4-year-old son starting pre-school, this seemed like a good time for the Wilsons to move. “We think we might be in this house for five or six years,” she says, “so we wanted to lock in a low rate for that time period. If rates go even

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