Life insurance for new parents

Why life insurance is important for new parents

Not being a part of your child’s future is something you never want to imagine.

But according to the Childhood Bereavement Network, the grim reality is that an estimated 26,900 parents die each year, leaving dependent children. This means on average, a parent dies every 20 minutes, with 127 children losing their mum or dad every day.

Life insurance for new parents could at least offer some reassurance, allowing you to enjoy your new family life without the niggling worry of ‘what if something happens to me?’. With cover available from £5.76 per month^[1], you’ll know that your nearest and dearest should have some financial protection if you weren’t around anymore.

^[1]10% of our customers were quoted less than £5.76 per month for their life insurance for a 10-year term, up to £175k worth of cover and no critical illness cover in March 2025.

How much life insurance cover do I need as a new parent?

There’s no one-size-fits-all answer. It’s something you have to work out.

Bringing up a child to the age of 18 can cost a lot of money. According to the Child Poverty Action Group, you could be looking at £260,000 for a couple and £290,00 for a single parent.

But when considering life insurance, you should factor in all your outgoings now and in the future, so if the worst happened, your costs could be covered.

Think about:

• Your mortgage – any loans and other large outstanding debts that could be a burden if the main breadwinner died

• Monthly outgoings – such as utility bills and other costs of running a home and a car

• Loss of earnings – if the bereaved partner had to give up work to care for the children

• Childcare costs – if the main carer died

• Educational costs – even if you’re not thinking about private education, there could be school uniforms, school trips, extra-curricular activities and maybe university or college fees further down the line to consider

• All the usual costs involved with bringing up a child – clothes, food, toys, activities, days out, holidays, birthdays and Christmases, to name a few.

To give you a rough idea of how much you might need in total, it’s often recommended that the target life-insurance payout should be at least 10 times the salary of the main breadwinner.

What’s the best life insurance policy for new parents?

If you’re looking for life insurance for young parents, start by deciding which type of life insurance cover you want. You might want to consider:

Level-term life insurance

You choose the payout amount and the length of time the policy runs for – the ‘term’. Your family will get a lump sum of the same amount, whether it’s paid out at the beginning or towards the end of the policy term.

The main benefit of this type of policy is that you know exactly how much your family would get if you died.

Decreasing term life insurance

This could work out cheaper than a level-term policy because the value of the policy decreases over time. So, the payout will be much larger for a claim at the start of the policy term, than a claim towards the end of the policy term.

Sometimes known as mortgage life insurance, this type of policy is often used to cover repayments for debts such as a mortgage, which normally decrease over time.

The downside of this type of policy is the payout might become smaller, just as you have to spend more on your children’s needs. And your outgoings include more than just your mortgage.

With both level and decreasing term policies, once the term finishes, the cover will stop. That means your policy won’t pay out if your death happens after the term has ended. Also, usually there’s no cash-in value at any time and if you stop paying, the cover will stop.

Whole of life insurance

As the name suggests, whole of life insurance pays out no matter when you die, provided you’ve kept up with the premiums. It can be much more expensive than term insurance, though.

It’s also worth thinking about writing your policy in trust. This means the proceeds from your life insurance won’t be counted as part of your estate when you die, so typically won’t be subject to inheritance tax.

Doing this can be helpful in getting any payout into the hands of beneficiaries faster as the money won’t be held up by probate, which can take up to a year. They’ll be able to use it almost immediately to help with costs, including your funeral. The main drawback is that once a policy is in trust, it can’t be taken out. And any changes will need to be made via the trustees.

How much does life insurance cost?

The cost of a life insurance premium depends very much on your personal circumstances – your lifestyle, how old you are, your health, if you smoke and the type of policy you’re after. However, our customers could get life insurance for £10.69^[2] per month.

We know that as new parents, your costs of living have likely risen. That’s why we’re here to help you search for personalised cover at the right price for you. Check out the latest life insurance deals.

^[2] 51% of our customers were quoted less than £10.69 per month for their life insurance for a 10-year term, up to £175k worth of cover and no critical illness cover in March 2025.

Do I need life insurance if I’m not the main breadwinner?

If you’re a stay-at-home parent, life insurance is definitely worth considering. Think about how your partner would cope with the costs of bringing up a child if you were no longer there. They might need to organise full-time childcare, or even cut back on their working hours to stay at home more themselves.

Will life insurance cost more while I’m pregnant?

Taking out a life insurance policy when you’re pregnant shouldn’t cost more than it normally would. However, if you have medical issues related to your pregnancy this may affect the cover you’re offered.

I stopped smoking as soon the pregnancy was confirmed. How will that affect any life insurance I might take out?

For insurance purposes, if you’ve used any tobacco products in the past year, including nicotine-replacement products, you’re classed as a smoker.

But your smoking history isn’t the only thing that affects the cost of your premium – your health and lifestyle will, too.

Life insurance for single parents

If you’re a single parent, you may want to set up a single life insurance policy to ensure your child is financially protected if you die. This could be particularly important if you’re the sole carer and your child is completely reliant on you financially.

Again, writing a will is very important. As a single parent you can set out your wishes for what should happen if you die. This could help stop any disputes between family members at a difficult time by providing more certainty about what you wanted.

What other types of insurance might I need as a new parent?

As well as life insurance, there are other types of financial protection you might want to consider for your new family:

• Critical illness cover – this can be added to your life insurance or bought as a standalone policy. It could offer financial protection in the form of a one-off payment if you became seriously ill or injured with a condition listed on your policy.

• Income protection insurance – can replace your regular income if you’re sick or injured and unable to work. Depending on the policy, you could also cover periods of unemployment; for example, if you’re made redundant.

• Family health insurance – while you and your family may be entitled to NHS care, a family health insurance policy could cover the costs of private treatment with the added benefit of shorter waiting times.

Compare life insurance

Start a life insurance quote now