Key Takeaways

• • When you’re welcoming a new child into the world, life insurance is a critical investment that protects their future and your dreams for them.
  • Life insurance may help cover living expenses, school needs, and even pay for college if you can’t be there.
  • Term life insurance is often the best type of life insurance for new parents, but choosing the right type and amount of coverage for your new family is an important step.

Why Do New Parents Need Life Insurance?

Welcoming a new child into the world is one of life’s biggest joys – and one of the biggest responsibilities. As a new parent, you’re looking forward to many years of raising your family and what this new addition means to your life. You plan to be there for your child from their first step to their final day of high school and beyond. It’s an exciting time, with plenty of breathtaking moments along the way.

Whether you’re welcoming your first child or your fifth, providing for your child’s financial needs throughout your lifetime is a must. Should the unspeakable happen, you want to ensure your child’s needs are still met, so they can live their best life.

Many new parents focus on the first months and years, but it’s important to think about long-term financial security for your child, too. You want to make sure your child can maintain their quality of life through adulthood and beyond, including good schools, proper housing, and a supportive environment where they can thrive.

That’s why life insurance for new parents is a critical investment. Life insurance provides financial support to meet your child’s needs, whether they go to a top-rated college or spend 10 years taking dance lessons. Getting covered gives you a way to provide financial stability and peace of mind to your family if you pass away while those dreams are still coming true.

When Should New Parents Buy Life Insurance?

Planning for a new baby? It’s never too early to purchase a policy to safeguard your child’s financial needs. The sooner you purchase insurance, the sooner you’ll have a safety net in place to protect your family.

If you’re currently expecting, you can purchase life insurance prior to the baby’s birth. Doing so isn’t complex, and being pregnant won’t impact your ability to qualify in most situations.

There are a few things to remember when buying life insurance as a new parent:

• Buy sooner to save more. Life insurance rates go up as you age, so purchasing now can help you save. Consider getting covered even if you’re thinking about having a baby to lock in lower rates and gain peace of mind.
• Avoid pregnancy complications. If you’re pregnant, applying later on in your pregnancy increases the chances of health complications that could make coverage more expensive or prevent you from qualifying. You’re less likely to have high blood pressure or gestational diabetes early on, for example, minimizing coverage concerns.
• Cover the risks now. Getting coverage sooner means protection is in place on the slight chance something goes wrong (including labor complications). Ensure your loved ones can take care of the child fully with financial support.
• Life’s about to get busier. Once your little one is here, life will become a blur of diapers, feedings, and snuggles pretty fast. Checking life insurance off your list early can help clear distractions later, so you can focus on bonding with your baby.

Do Stay-at-Home Parents Need Life Insurance?

Some people may not realize that stay-at-home parents need life insurance, too. You may not be earning a paycheck, but you’re still providing childcare, driving them around, keeping up with the house, and meeting other obligations. Those are all tasks your partner would have to pay someone else to manage if you weren’t there – and those costs can add up.

Life insurance can help your partner cover the cost of childcare and other expenses, or even take time off to be with your family if something happens to you. To ensure either option is available, make sure you have ample life insurance, even as a stay-at-home parent.

What Kind of Life Insurance Do New Parents Need?

The best life insurance for new parents is often term life insurance . This type of policy provides coverage for a set number of years, typically anywhere from 10 to 30 years. Affordable and flexible, term life can be a good fit for new parents who want to protect their child until they’re financially independent.

Term life insurance policies offer a few key advantages:

• Guaranteed protection. Term life insurance is in place for a set number of years, during which guaranteed protection is provided. That means if you pass away within the term, the life insurance coverage pays your named beneficiary the policy death benefit. Your guaranteed payout is promised as long as you continue to make payments on the policy during your lifetime.
• Affordable, level premiums. The premiums, or payments you’ll make, are the same throughout the entire policy with most term life policies. Unlike other policies where the premiums rise over time, term life insurance keeps those costs easy to anticipate. This creates more predictability for parents, something all new parents can appreciate. The lower costs of term life insurance also make it ideal for those who are juggling things like the cost of diapers or saving for a new home.
• Terms to fit your needs. Choose from 10, 15, 20, and 30-year term life insurance policies based on your needs. You may want a policy that’s in place for just 20 years, which provides enough time for your child to grow into adulthood. Knowing that many kids who go to college still depend on their parents (and sometimes come back after college, too), it may be a better option to choose a 30-year policy.
• Medical exams are not always a requirement. If you’re pregnant or recently gave birth, you may be a bit concerned about having a medical exam. Fidelity Life offers the option to delay a medical exam up to six months, along with options that don’t require an exam. Don’t worry – even if you need one, your pregnancy is not a factor in determining eligibility (even the extra weight gain from being pregnant!).

Permanent life insurance is an option, too

Term life insurance policies are a solid option for many new parents, but your situation is unique. For some, locking in a permanent life policy now makes sense.

With permanent life insurance, you don’t have to limit your coverage to just 30 years. As long as you continue to make payments, a permanent life insurance policy remains in place for your entire lifetime. That type of protection can be valuable for those who have a child that may be financially dependent on them long-term. For example, if your child has a disability, permanent life insurance can help to meet your child’s needs for the rest of their life.

How To Buy Life Insurance as a New Parent

Wondering how to get started? First, take a deep breath. The process is easier than you might think.

Step 1: Consider how much life insurance you need.

When buying life insurance, the goal should be to cover your obligations if you pass away – the costs you don’t want your family to worry about if you’re not there. Consider your current financial obligations, as well as future plans and goals. Here are a few ways to go about it:

Earning income?

Some people follow the simple guideline of seven to 10 times their income to determine how much coverage they need. A payout of that size could replace your annual salary for your loved one for the next seven or 10 years, without the need for them to make lifestyle changes. This method is a good starting point, but typically does not include factors such as economic recession, interest rate growth, or inflation. Many families need more than this.

Stay-at-home parent?

Life insurance is still important when a person doesn’t contribute financially to the family. Add up the cost of childcare for your child, along with the cost to outsource other household or family-related tasks you currently manage.

Day-to-day expense coverage

New parents have a lot of new expenses to consider. Add up your average costs for diapers, formula, clothing, and childcare. Determine how much you may need to cover a child’s medical needs. You may also consider things like food, furniture, and even the cost of educational toys you hope your child will love.

Factor in college

Don’t forget the cost of college and student loans. If you want to leave behind enough money to cover your child’s college expenses, expect to need about $100,000 at a minimum (your Ivy League student may need more!).

Debts and mortgages

Eliminate debts for your partner and child that could cause financial challenges if you pass away. Life insurance can help cover the cost of all your debts, including car loans, student loans, and the mortgage. Add up all debts, including the balance owed on your mortgage loan, when considering the amount of coverage you need.

Final expenses

Provide for your final needs as well, including funeral and burial expenses. Make sure there are enough funds to pay for any specialized care you desire for end-of-life needs.

As a new parent, it’s hard to grasp all that is to come – right now, you’re dealing with rapid growth and changes on a daily basis, as is your child. Fidelity Life’s life insurance calculator can help give you a better idea of what to plan for in the years and decades to come.

Step 2: Shop and compare plans.

Once you have a sense of your needs, you’re ready to compare costs for different life insurance plans. With Fidelity Life, you can get free personalized life insurance quotes online in less than a minute by answering a few questions.

To get a quote, simply answer five basic questions about your family status, age, gender, employment, and health. Based on your options, select a policy with the coverage and cost that works for you and your family. If you need a second opinion, our agents are available by phone to help you find the right fit.

Step 3: Purchase your policy and name your beneficiaries.

Once you’re ready to buy, Fidelity Life makes it simple to buy over the phone or online. You can buy a RAPID ecision® Life term life plan online in about 10 minutes, or call an agent to purchase any of our plans. Coverage often starts the same day.

When you purchase a policy from a life insurance company, naming a beneficiary is one of the biggest decisions you’ll make. Beneficiaries are the people you list on the policy to receive the payout in the event of your death. Each policy requires a beneficiary. Commonly, this is your spouse, partner, or the other parent of the child.

List a secondary beneficiary as well. If a car accident were to occur and both parents die, who do you want to manage these funds for your child? It may be the guardian you’ve listed in your will to take care of your child.

Although you’re buying life insurance to help protect your child, actually naming your little one as the beneficiary is a no-no. States generally don’t allow children to collect life insurance proceeds until they turn 18. If you want your child to receive the funds, one option is to create a life insurance trust and name it as the beneficiary of the policy. Work with an attorney to establish this type of trust to minimize costs and ensure your wishes are met.

Should New Single Parents Get Life Insurance?

It’s essential for single parents to obtain life insurance. If something happens to you, you want to know there are funds available to ensure your child’s financial future is stable, just as if you were there to provide for their needs. You can use a trust or the guardian as your beneficiary to meet these obligations.

As a single parent, life insurance may be more important than any other investment you make for your child in these early years. There’s no way to know what the future holds, but having a policy in place can help ensure their needs such as education, medical, housing, and overall well-being are met on a consistent basis.