Life insurance for new parents

How long before having a baby should I get life insurance?

You'll want your life insurance policy to take effect before your baby is born, which means you should purchase it at least four to six weeks prior to your baby's due date to allow sufficient time for the underwriting process.

If you can, it's wise to invest in life insurance right now — regardless of when you're expecting your first child. There are many smart reasons to do so, including peace of mind for your family in the event something were to happen so that they can cover both daily expenses and future expenses. It’s also important to note that the cost of life insurance increases as you get older, so the younger and healthier you are when applying for a life insurance policy, the more affordable it will be.

Another practical reason to invest in life insurance before starting a family is that you could avoid higher rates due to common pregnancy-induced conditions, such as gestational diabetes. Since most life insurance policies require a medical exam, unexpected conditions resulting from pregnancy could affect your policy rate.

What is the best life insurance policy for new parents to start with?

There are two types of life insurance to consider: permanent life and term life. You may already have a permanent life policy, but if you're going to become a new parent, it may not necessarily be the best option — or enough to provide for your child.

Permanent life insurance

Permanent life insurance lasts for the entirety of your life, provided you continue to pay your premiums, and consists of two types of polices: whole life and universal life. Due to its permanence and additional benefits, like a cash value, permanent life insurance tends to be more expensive than term life. While both are used primarily for burial costs and end-of-life expenses, term life insurance may not always be enough and coverage may end prematurely, requiring a new policy.

Term life insurance

A more affordable option for new parents is term life insurance. This type of policy lasts for a specific number of years and has an expiration date. It doesn't offer additional benefits and acts solely as a life insurance policy, making it a frequent option for families just starting out.

Term life policies can have exponentially higher benefit amounts than whole life insurance policies for the same cost or less. If you want to secure enough benefits to raise your child as they grow, even if you aren't around, term life insurance is the most practical and affordable option.

A 20-year term life insurance policy can cover your child's needs until they turn 18. By the time the policy expires, your child may be living on their own, which means you may no longer need the additional coverage.

How much life insurance do new parents need?