Having a family can be one of the most rewarding, and at the same time, expensive things you can do. Some estimates put the average cost of raising a child before college expenses at somewhere around $500,000 US. With figures like that, it is no wonder that a solid financial plan is vital when you have a family.

As expenses rise, one of the most important foundations of a financial plan that is often overlooked is life insurance. Insurance in general can put a bad taste in many people’s mouth because they rarely find themselves actually using it. They just pay a premium every month, and nothing happens.

While this may be true for most people who buy insurance, there are a select few that the same premiums end up saving them from major financial disaster. Anyone in a big auto accident that spent some time in the hospital, or a family who’s primary income provider suddenly passed, can attest to the importance of proper insurance coverage.

What Life Insurance Covers

The purpose of life insurance is to cover the cost of replacing the activities a family member is responsible within a household. If the primary role is an income earner, then a good rule of thumb is to get 10x the annual dollars earned. This allows a family to draw part of the funds each year to cover the missing income.

Life insurance also covers the cost of hiring help in the event of a death. For example, if one family member stays home with the kids and takes care of the household chores, those tasks would need to be taken care of if that family member passed on.

Who Should Be Covered?

Any person that contributes to the family, and whose contributions would be difficult to replace should have life insurance coverage. The primary breadwinner absolutely needs to have coverage, as does a stay-at-home parent that does the household chores. Additionally, if an older sibling is the primary caretaker of younger children on a regular basis, the cost of replacing childcare should be considered as well.

What Type of Life Insurance is Best?

While every family has different needs, most would benefit the greatest from term life insurance. There are many different life insurance products out there, but most are complicated and wrapped around long-term investment products. The truth is that these other forms of life insurance are very costly and in most cases do not provide the same protection for each dollar spent.

There are a few cases where more complicated life insurance products would work well for a family, but that is typically reserved for those involved in estate planning or high net worth individuals.

Where to Get Life Insurance

Almost all major insurance providers offer some form of term life insurance, but the prices can vary dramatically depending on which company you choose. The best way to find good coverage at a reasonable price is by using an online broker that will search multiple companies for you. By entering some basic information about you, they will provide a list of companies along with their prices. Typically, they will also help with the application process.

Eric Stauffer is an insurance guru who reviews companies like eHealthInsurance and Nationwide. He also writes buying guides that help individuals and families learn the best way to shop for insurance.