Purchasing life insurance before pregnancy is a great decision. Pregnancy and any related complications can make it harder to obtain coverage and may lead to higher premiums. However, if you are already pregnant, you have options.
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Life insurance for new parents
When preparing for a new baby, parents have a lot to think about. Life insurance might not be top of mind, but it is an important way you can protect your family’s future. See how different coverage options can contribute to your family’s financial stability, no matter what happens.
Life insurance for new parents
Becoming a parent is one of life’s most wonderful gifts and profound responsibilities. And it comes with an intense desire to do everything in your power to protect your child and ensure a bright future. Amid all the planning, nesting, and babyproofing, one thing that often gets lost in the shuffle is a life insurance policy.
Should new parents get life insurance?
Life insurance provides a financial safety net, usually in the form of a lump-sum payment, should something happen to you. It can help your family through a tough emotional time by easing the burden of medical bills, emergency costs, and final expenses. Perhaps more importantly, insurance can help pay for ongoing needs like childcare, housekeeping assistance, extracurricular activities, mortgage payments on the family home, and preparations for college.
Types of life insurance for new parents
Life insurance can fill different needs depending on the type you choose. Most life insurance policies are one of two major types—term life or whole life—but there are many different options and nuances you should discuss with a financial professional. Each has its own unique benefits.
Term life insurance
Term life is designed to protect your family during a specific span of time, often coinciding with a 30-year mortgage or the first 20 years of a child’s life. When the insured term is completed, the life policy comes to an end. Many options are available, and comparing term life policies can help you tailor a policy to your specific needs.
Whole life insurance
Whole life insurance differs from term life in that the death-benefit protection is guaranteed1 for life, not just a set number of years, as long as you pay your premium when due. Whole life policies provide tax advantages and accumulate cash value that can be accessed2 during your lifetime. The premiums are guaranteed to remain steady and will not increase due to inflation or other factors.
Life insurance for children
While, as a parent, you should have coverage on yourself to ensure that your child has the financial support they need throughout their life, whole life insurance can also be used as a lifelong gift to your child. You can lock in low rates while they are young, and the policy can be transferred to them when they become adults. Purchasing life insurance for children is a way to ensure that they have coverage with low premiums their entire lives, and the accumulated cash value can help them fund their dreams.
What is the best life insurance for new parents?
When planning insurance coverage, insuring both parents is vital. In addition to replacing the lost income of working parents, insurance can also be used to cover the contributions of stay-at-home parents, including childcare expenses and domestic help.
The best type of coverage for you and your family depends on your goals and budget. You’ll also want to consider any debts or obligations that you may have and plans for major events like college enrollment. To cover all your bases, it’s possible to have both term and whole life insurance. However, if you’re on a tighter budget, term life insurance tends to fit within your budget.
When to get life insurance for expecting parents
It’s never too early to purchase life insurance. In fact, purchasing coverage before planning to have a family is ideal, because the younger and healthier you are, the lower your premiums are likely to be. And once you’re expecting, other preparations will compete for your attention.
Life insurance can also be purchased during pregnancy. Securing coverage in the first trimester is best as it may become harder to get coverage later, particularly if there are pregnancy complications. Some insurance providers may consider pregnancy a pre-existing condition, which could lead to higher premiums. If that’s the case, it may be a good idea to seek out policies that do not require a physical exam. If you are purchasing life insurance while expecting, it is important to let the insurance company know. A financial professional can help you understand the advantages of each type of coverage and how to best meet your family’s needs.
Life insurance for new parents FAQs
It’s never too early to buy life insurance. Coverage tends to become more expensive as you get older and potentially develop more health conditions. To get ahead of things, you can also purchase life insurance policies for your children to ensure that they have coverage at lower premiums later in life.
When determining how much insurance to get, it’s worth taking several factors into consideration like:
- how much is needed to sustain your family’s lifestyle
- how many years of income you wish to replace
- a family member’s special needs
- debts and financial obligations like mortgages and car payments
- college-tuition needs
Life insurance does cover maternal death during childbirth. However, it is not possible to insure an unborn child. It should be noted that if you were pregnant while securing coverage and did not disclose the pregnancy, claims against the policy may be denied.
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Ensuring that your loved ones are protected no matter what takes diligent planning. A New York Life financial professional can help determine what’s right for you and your family.
1Guarantees are based upon the claims-paying ability of the issuer.
2Accessing cash value reduces death benefit and available cash surrender value.