When you’re expecting a baby there’s a lot to think about. There’s the birth itself, antenatal classes, nursery décor and that all-important pram. In this mass of preparation, it’s also worth thinking about how you’ll protect your new family, and that’s where life insurance comes in.
Life insurance could be one of the most important things you do to protect your little one’s future. Of course, no amount of money could ever replace you, but it could help cover costs, and lessen financial worries if the worst ever did happen.
We know you’ve got a lot on your plate, so here’s a quick family life insurance guide to help you explore your options. As your time is precious, we’ve kept it short and sweet.
Why should I think about life insurance now?
When you start a family, life isn’t just about you anymore. You have new responsibilities and a baby who depends on you for everything. So, it’s not surprising that many of us start wondering how our family would cope if the unthinkable happened.
It’s never easy to think about a tragedy striking but having life insurance in place means your family would have some financial security there to help them carry on living life as normally as possible.
How could life insurance help?
Life insurance could protect the people you love in a variety of ways:
Cover the cost of a stay-at-home parent
If you’re having a baby, it’s likely you’re going to be a stay-at-home parent - at least for the near future. This means if anything happened to you, your partner would probably have to reduce their hours at work, or pay someone to do the many things you do.
Help to pay bills and debts
If the unthinkable happened, your partner would still need to pay the mortgage or rent and the household bills. Life insurance could ease this financial burden and ensure your family can stay in the family home.
Help with special little extras
A life insurance payout could help cover the small but special things that add so much to your family’s way of life. So your children could carry on doing what they look forward to each week, from swimming lessons to after school club and hobbies.
Protect their future
It might seem a long way off right now, but one day your baby may be off to college or university. Taking out life insurance would mean money could be there to help them realise their dreams, even if you weren’t around.
Should we take out life insurance for mum and dad?
It can be a good idea. Especially when you have a young child who is completely reliant on you.
If you’re working, how would your family make ends meet without your salary? And if you’re at home looking after the kids, without you the cost of childcare and the all the other things you do for the family could mount up quickly.
What type of life insurance is available?
There are two types of life insurance for parents; the more common is term life insurance.
Term life insurance
With term insurance you choose to be covered for a set period of time. If you died within this time, the policy would pay out. How much you pay each month depends on the term you choose, your age, your health and lifestyle and the amount of life insurance you need.
This type of cover can make sense for parents with a young family as you can choose to cover the years when your little ones need you most and stop once they’re old enough to look after themselves.
As the name suggests, this kind of insurance covers you for the whole of your life, rather than for a specific period of time. Put simply, you pay a set amount into your life insurance plan every month and the policy will pay out whenever you die. This option is less common for younger parents.
Critical illness cover
As parents of children, it can make sense to add critical illness cover to your life insurance policy. Critical illness insurance pays out if you are diagnosed with a serious illness or have a stroke or heart attack. Exactly what is covered varies between policies so always check the details.
How much insurance might I need?
This very much depends on your circumstances. It’s worth having a think about how long you want to be insured for and the amount of money you might need to cover your income, debts, lifestyle and even funeral costs.
Life insurance for new parents really can make sense. After all, it’s good to know the people you love will have some financial security, whatever the future holds. And once it’s in place you can get on with enjoying your little bundle – and all the joys of parenthood.