Life Insurance for New Parents
Having a child is very a very exciting and life changing process, bringing with it all sorts of new challenges and responsibilities.
When your family starts to grow, it is more important than ever to make sure that you’ve got the right measures in place should the worst happen.
In this guide:
What extra expenses should I have in mind when taking out life insurance as a new parent?
A growing family unfortunately means a growing list of expenses. You’ll want to make sure that any life insurance policy you take out covers you for everything you need.
Childcare is the most obvious new expense to think about when you have a new child. This includes everything from food to education and other general utilities.
You’ll want to make sure, should the main breadwinner in the family unfortunately pass away, that the remaining members of your family have the means to supply the provisions your children need. You could also consider having your life insurance policy pay out into a trust fund for you children that they can access when they reach a certain age, easing the financial burden placed upon them throughout their life.
Mortgages are consistently one of the main expenses for every family and continuing repayment of the mortgage is one of the main reasons for taking out life insurance policies in the first place.
However, once you have a child, you might want to adjust your policy if the pay-out initially decided upon is only large enough to cover your repayments, potentially leaving you with a shortfall if your family needs to provide for another child as well.
The same goes for any other loan repayments or credit cards you have to pay off, either those already existing or those that you take out to help you keep up with the added expenses to do with the upbringing of your new child.
How much will I need my life insurance policy to pay out?
There are various things you’ll want to consider when working out the size of your life insurance policy as a new parent.
In general, you’ll want the value of your life insurance pay-out to be around 10 times the value of your annual income. This will of course this will depend on things like the size and age of your family, as well as whether or not you are the main earner in your household.
If you are not the main earner and say you spend most of your time at home looking after your children, then this should factor into the nature of your life insurance policy.
Your passing might, for example, mean that your household expenditure related to childcare could increase with the need to hire a child minder or to pay nursery fees.
Compare Life Insurance for New Parents
In order to get the best deals around on your life insurance as a new parent, you should use our comparison service.
Just let us know what kind of cover you’re after and we’ll get a list of the best quotes around to suit your needs, easing your mind and your wallet in one go.