Life Insurance for New Parents: What to Know Before Baby Arrives
Mar 5, 2025
2 min read
When new parents have a baby, they focus on safety first — baby proofing the house, finding the right pediatrician, learning everything they can about proper nutrition and sleeping habits — and then start looking toward the future.
But don’t wait too long, Life insurance for new parents is a vital way of protecting the future for your baby. You may have questions. Will having a baby raise life insurance premiums? Should I get my baby life insurance? What kind of life insurance plan should I get, and can I get it while pregnant? You may want to expand existing coverage or take out a new policy.
Life insurance for new parents can provide peace of mind and financial security for your family. Here’s what you need to know about life insurance as a new parent.
1. What Is the Best Type of Life Insurance for Young Families?
Out of the many types of life insurance for new parents, term life insurance is the most practical because it provides an affordable way to get coverage for a low price. Term life can be structured for 10, 20 or 30 years — depending on the number of years it will take for your child to grow up and become financially stable. If the worst happens, term life benefits can provide the safety net needed to keep kids on a path to financial independence without the burden of mortgage and education debt.
2. Do Both Parents Need Life Insurance?
Yes. Today, most families are dual-income families. Having both parents insured covers the loss of a significant portion of a family’s income. Even if a family has just one primary income earner, the other parent is likely responsible for childcare and household management, and those are expenses that would not be covered if that parent were to pass.
It’s also important to secure life insurance for both parents as soon as possible, since rates rise with each year of age. The younger and in better health you are, the easier it will be to acquire life insurance with premiums payments that fit your budget.
3. Can You Get Life Insurance While Pregnant?
Yes, but expect higher rates. Life insurance premiums are lower for young people in good health. Life insurance premiums may increase for young mothers during pregnancy because of the inherent risks involved. It’s best to get life insurance before a pregnancy to lock in the most affordable premium.
If you are applying for insurance during pregnancy, certain pregnancy related health changes may affect eligibility. Applying for life insurance after having a baby will also be more complicated. Common factors used to determine insurance costs such as weight, blood pressure and cholesterol level are impacted by pregnancy.
4. How Much Life Insurance Do New Parents Need?
The Brookings Institute estimates the average cost to raise a child in a middle-income U.S. household is more than $300,000. That does not include supporting a child through higher education, potentially another four to eight years of out-of-pocket financial commitment.
To determine how much life insurance is needed, consider the daily expenses of maintaining the household if the primary income earner’s wages are taken out of the equation. Add to that the cost of future expenses such as final expenses, education and the length of time a death benefit is needed to cover those costs. That should give you an idea of how much financial protection you need your policy to provide in the event of your death.
5. Life Insurance & Your Baby: What to Know
New parents can take out life insurance plans to protect their kids. (You can add children to your term life insurance policy starting at 7 days old with a child rider.) However, it’s best to name a partner or designate a trust as the beneficiary, not the child.
Minors cannot receive death benefits, so it makes more sense for a trusted adult to carry out financial wishes. With an adult making financial decisions, children can benefit from a life insurance death benefit by becoming debt-free in the short term and paying for college and living expenses in the long term.
Plan for the Future
Life insurance brings the peace of mind that comes with knowing you are protecting your family’s financial well-being should tragedy strike. Contact a Farm Bureau agent to learn more about the best type of life insurance for young families just starting out.