A simples guide

Life Insurance for New Parents

Becoming a new parent is an exciting time; you finally get to meet your bundle of joy and are suddenly responsible for another life.

That newly found responsibility can often leave you wondering about how best to secure your child’s future should anything happen to you.

Many parents go through worse case scenarios in their mind but being proactive and investing in a life insurance policy could help put you at ease.


What life insurance should be considered for new parents?

The most affordable life insurance premium is likely to be decreasing term insurance; this is often referred to as mortgage life insurance as the lump sum paid out decreases over time in line with your outstanding mortgage balance. As the amount paid out decreases over time the monthly premiums are often lower than that of a policy where the pay-out doesn’t decrease.

Deceasing term insurance would pay out if you passed away, which would allow your loved ones to cover the mortgage and potentially clear outstanding debts that you might leave behind.

However, another option is level-term insurance. The difference with this policy is that the level of cover remains the same over the period of your policy and doesn’t decrease. These insurance policies are valid until the policy expires on the date which you agree when you take out the policy.

The final option is very much like level-term insurance however the policy covers your whole life. This is known as whole-of-life insurance, and will quite literally cover you for the whole of your life and not just a set period of time.

new parents

How much life insurance do new parents need?

Everyone has their own circumstances, so there are no quick answers as to what will suit you best. Life insurance could be an important aspect of your new families’ security and you should ensure that you put a lot of thought into the amount of cover that your family will need.

If you are struggling to find a baseline to work from, you could try to begin with considering what costs will be left for your family to cover in your absence (mortgage, bills, childcare), and what financial sum is needed to relieve these costs. 

What should I take into consideration when deciding upon the amount of cover I need?

There are a lot of variables to consider and some personal to you that won’t even be touched upon here, however these can help give you a quick idea of some of the basics:

  • The amount spent to up keep your home.
  • The amount spent on regular food and clothes shopping.
  • The amount of household income contributed to from you and your spouse.
  • Any credit cards debts
  • The balances remaining on your mortgage

How much should I expect to pay for life insurance?

As a new parent you may find that there are some free cover options available to you but these generally only last for 12 months, don’t cover you for a high amount and have strict conditions. If you are looking for additional cover, you may need to take out another policy to top this up

It is difficult to estimate the amount your policy would cost without accounting for the variables we have begun to discuss above. The best way to get a fair deal on your life insurance policy would be to shop around and find an insurer that suits your needs.

Whilst that used to be a time consuming task, you can now compare life insurance providers right here and get a quote within just a few minutes. Just select the type and the amount of cover that you would like and provide some basic information about you and we will take care of the rest.

But don’t forget to make sure that you thoroughly read through the terms of the policy and have accounted for all of your outgoings. Life insurance is a huge part of your family’s financial security and it deserves your time and attention.

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