Life Insurance as a new parent

Welcoming a child into this world is the start of an exciting journey. You might be busy navigating responsibilities and important decisions, and one of those might be thinking about getting or reviewing your life insurance as a new parent. We’ve put together a few things for you to consider.

Why should you consider it?

No one wants to think about using life insurance but it’s important to make sure you have it in place to protect your loved ones. A lump sum will be paid to your family to ease the burden of paying expenses and ensure they are taken care of when you’re no longer there to support them.

Which parent should get it?

Often new parents will be on one income if one parent chooses to stay home and care for their newest family member. It may make sense to only insure the working parent, but you’ll also need to think about the impact of losing a caregiver. Even though stay-at-home parents don’t earn an income, they keep the household running. If they were no longer around, would you have family support or would you need to pay for childcare? Thinking through different scenarios will help you determine how much insurance you might need.

What type of life insurance should we get?

The two most common types of life insurance are term life and whole-of-life insurance. With term life insurance, you’re paid out the agreed amount if you’re diagnosed with a terminal illness or pass away within the period of time set out in your policy, i.e. 20 years. Whole-of-life insurance is what the name suggests, your cover lasts for life as long as you continue to pay the premiums – this is often more expensive than term life policies though.

Can our child be insured too?

Quite a few life insurance policies have the option for you to include your children under your policy. It’s often at no additional cost to you, and it means that if your child is diagnosed with a condition that’s covered under your policy, you’ll receive a payout to help you look after them. Not all insurers offer this as an option but it’s worth checking out – have a chat to an adviser to see whether you’re eligible if it’s something you’d like to look into.

If you want to know more about how life insurance can help you to protect you and your family, get in touch. We’ll take a look at your situation and recommend the best cover for your situation and your budget.