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Here's the six-figure mistake millennial parents are making

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For millennials having children, here's another worry they can add to the list: They are underinsured.

A recent survey from Haven Life Insurance Agency showed that seven out of 10 of these parents have less than $250,000 in life insurance.

In March, the firm took an online poll of 500 adults with children ages 5 years and under.

 

By contrast, these millennial parents report spending approximately $10,000 a year on child care expenses — which accounts for about 12 percent of income, according to the study.

They're also devoting more than 30 percent of their income to housing costs.

"There's a lack of education about life insurance," said Yaron Ben-Zvi, co-founder and CEO of Haven Life.

"People often assume they have adequate coverage through their employer, but it's inadequate in terms of the amount and you can't take it with you if you leave the job," he said.

Here's how to figure out whether you have enough to insure your young family.

Income protection

"The most common mistake I see is when people assume that the policy at work is sufficient," said Matt Cosgriff, a certified financial planner at BerganKDV in Minneapolis. "They're often two times your income."

That's far less than what's needed: Generally it should be an amount that's equal to 10 times your income, he said.

Exactly how much coverage you require will depend on whether you and your spouse work, whether your income is fixed or variable, and how much you and your spouse earn.

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