Starting a family is the most common reason people buy life insurance.
Having a child is the single most common life event that triggers people to buy life insurance — and for good reason. Your family just grew by one completely dependent person who will rely on you financially for at least 18–22 years. If something happens to you or your partner, life insurance ensures your child's future is protected.
Both parents should have coverage, even if one stays at home. The stay-at-home parent provides childcare, cooking, cleaning, transportation, and household management — services that would cost $40,000–$60,000 per year to replace. A policy of at least $250,000–$500,000 for a stay-at-home parent is often appropriate.
The best time to buy is as early as possible. Here's why:
A good starting point is 10–15x your annual income, plus enough to cover major future expenses. For new parents, consider these specific costs:
Many parents wait until after the baby is born to think about life insurance. That's understandable — but applying during the second trimester locks in your rate while you're younger and gives you one less thing to worry about when the baby comes. Use our Family Protection Planner to estimate your coverage need in about 3 minutes.
Generally, no. Children don't have income to replace or dependents to protect. The money is better spent on a 529 college savings plan or increasing your own coverage.
A 20 or 30-year level term policy is the best fit for most new parents. It covers the years until your children are independent and costs a fraction of permanent insurance.
You can, but it's not recommended. Minors cannot directly receive life insurance payouts. Instead, name a trusted adult or set up a trust, and specify that the funds should be used for your child's benefit.