Life insurance for new parents

Starting a family means learning all the new responsibilities that come with being a parent.

From babyproofing your home to buying baby monitors, you’ll want to make sure all aspects of your child’s life are protected.

Life insurance can help to financially protect your family should the worst happen to you by providing a lump sum payment.

Why is life insurance important for new parents?

Starting a family is a huge milestone, and life insurance can play an important role in keeping your loved ones safe.

It can be hard to think about, but bereavement amongst children is more common than we think.

The Childhood Bereavement Network estimates that around 26,900 parents die each year, with 46,300 children aged 0 – 17 being left behind.

It’s a horrible statistic but one that highlights the importance of being prepared for the unexpected.

A life insurance payout could help your family to keep up with their daily living costs, meaning they don’t have to make significant changes to their lifestyle at an already distressing time.

How much life insurance do new parents need?

This depends on your family and what you’d like to protect for them.

Being a parent isn’t cheap, and it’s natural you’ll want to give your child the best start in life you possibly can.

As new parents, you might want to cover:

• The mortgage and household bills to keep a roof over your family’s heads
• The cost of your usual childcare hours, plus extra to cover any additional hours that might be needed
• Schooling costs (such as uniforms, lunches, books and stationery), as well as university costs (fees, accommodation, books and living costs)
• Your income, so your family can continue with their usual family spending (such as the food shop, clothes, hobbies, trips out, etc.)

You could also consider that the estimated cost of raising a child to 18 is £260,000 for a couple and £290,000 for a single parent.

Why not use our life insurance calculator to work out how much life insurance you'll need as a new parent?

How to choose the best life insurance for new parents

The best life insurance for your family will depend on:

• How long you’d like your policy to last
• What you want to cover
• How you’d like your policy to pay out

As a new parent, you could consider:

• Level term life insurance: Level term life insurance is a popular choice for young parents to help protect an interest- only mortgage and family living costs. You’ll be covered for an agreed period (which could mirror your mortgage term to keep your family in their home or until your child reaches adulthood). The payout stays the same throughout the policy term.
• Decreasing term life insurance: Decreasing term life insurance is an ideal option for protecting a repayment mortgage. You’ll be covered for an agreed period, and the payout amount will reduce throughout the policy term.
• Family income benefit: Family income benefit covers you for an agreed amount of time. Instead of paying out a lump sum, it will pay out in monthly payments if you die during the policy term. It’s a useful option for families that would find budgeting a lump sum overwhelming.
• Whole of life insurance: Whole of life insurance lasts for life and guarantees a payout when you die. For this reason it’s great for providing an inheritance or inheritance tax planning (when written in trust). You’ll need to pay premiums for the rest of your life, so it could become an expensive option for young parents.
• Life insurance with critical illness cover: You can add critical illness cover to both level and decreasing term life insurance. It will allow you to make an early claim on your policy if you’re diagnosed with a specific serious illness during the policy term. Some policies will also include children’s critical illness cover, meaning both you and your child can be covered.
• Joint life insurance: All the options listed above can be taken out as a joint policy. Joint life insurance covers two lives under one policy, providing one payout when one partner dies.

It’s important to find out about all of your options when trying to find the best insurance for you.

One way to do this is to compare quotes for multiple different policy types and insurers.

How much is life insurance for new parents?

The cost of life insurance for new parents will depend on a variety of factors.

During the application process, you’ll need to answer a questionnaire which asks you about:

• Age
• Smoking status
• Current health & wellbeing
• Medical history (including your family medical history)
• Lifestyle (such as hobbies, alcohol consumption and drug use)
• Occupation

The type of policy, how long you’re covered for and how much cover you take out can also impact the price you pay. Typically, the longer you’re covered for and the more cover you take out, the more your policy will be.

If you’re currently pregnant and awaiting the arrival of your child, this shouldn’t affect the price of your policy (unless you’ve developed any medical complications).

Insurers will take information from before your pregnancy into consideration (such as your pre-pregnancy weight, plus your old smoking and drinking habits).

Can new parents get free life insurance?

Yes, some insurers offer free life insurance to new parents. 

While it’s generous for insurers to offer this, it’s still beneficial to take out a traditional life insurance policy.

With the free cover options, it will only last for a limited time and will only pay out a small amount in the grand scheme of raising a child. 

Do I need to tell my life insurance provider I’ve had a baby?

If you already have life insurance in place, you don’t need to tell insurers that you’ve had a baby.

However, it could be beneficial to contact your insurer to see if your policy includes the ‘guaranteed insurability option’.

This is an option that allows you to make changes to your policy, such as increasing your cover amount, to meet a change of circumstances – such as having a baby.

It’s likely that your current cover amount wouldn’t be enough to protect your new needs as a parent.

How can new parents buy life insurance?

In between juggling night feeds and making sure you get some much needed rest, we know it can be hard to find the time to find the right life insurance for your needs.

It can be time-consuming getting quotes from individual insurers, so why not try a comparison site?

At Confused.com, we can compare multiple life insurance quotes from some of the UK’s best insurers at once, saving you valuable time and money.