New Parents: Why You Should Put Your Baby on Your Life Insurance

Mother father and child playing flying in a plane in summer park

What if the best thing you can give your unborn child is something you never imagined? 

If you’re expecting a baby, you are probably focused on things like getting their room ready, buying diapers and picking out the perfect onesies.  Maybe you have already gotten a bigger car and the right car insurance to go with it. 

However, one of the best things any parents can do for their unborn child is to add the child to an existing life insurance policy. Why is this such an important step, and how much insurance should you actually take out? Keep reading to discover the answers! 

Getting Life Insurance Early Gives You the Best Rate 

If life insurance had a motto, it would probably be “better now than later.” Generally speaking, you can get a better rate when you are younger. As much as this applies to you and your partner, it also applies to your unborn child. 

While no parent likes to think about prematurely dying, adding your child as a beneficiary to your own coverage helps protect them when you are gone. Of course, you’re better off securing it for yourself and your baby before any health issues make coverage more expensive. 

Early Life Coverage Provides Peace of Mind 

It’s no secret that parents expecting a child have many things that may make them anxious. For pregnant mothers, this can include all of the physical and emotional stresses of pregnancy and labor. For both parents, it can be stressful to prepare the home for a newborn child and to prepare for all the ways that a new baby will change your lifestyle. 

One of the things we like best about this type of coverage is that it provides peace of mind, and that includes peace of mind related to your child. The cost of a funeral and burial service for a child could be many thousands of dollars, and this may be one more thing cash-strapped parents have to deal with when they are grieving. In the event of the child’s unexpected death, you won’t have to worry about the cost of the funeral and burial service while you are busy grieving the loss. 

Cut-out shot of an unknown pregnant woman sitting in an armchair using a laptop to buy life insurance.

Life Insurance for Your Baby Is Great If One Parent Will Be Staying Home 

Sometimes, the decision to put your baby on your insurance policy or not comes down to the arrangements you and your partner are making. For example, if one parent will be quitting their job to stay at home with the child full-time, it makes sense for both the child and the “breadwinner” parent to have life insurance

The death of a child is traumatic for any parent. If you are a stay-at-home parent, then a good life insurance policy means that you can take time to properly grieve rather than rushing back into the workforce and potentially sabotaging your career. 

That same logic extends to the breadwinning spouse as well. If they should unexpectedly die, it can throw the surviving family into upheaval. This could cause you to lose your home and effectively downsize your entire life. But if the breadwinning spouse has proper life insurance coverage, then the stay-at-home spouse and child won’t have to worry about losing their home in the event of an accident, and everyone can spend time properly mourning their departed loved one. 

How Much Insurance Should You Take Out on Your Newborn? 

It is always difficult to calculate how much  you should take out for your newborn child. In most cases, how much you should take out depends on your specific needs. 

For example, we previously touched on the high cost of burying a child that has passed away. Parents who don’t have much money and are worried about this possibility may wish to take out a modest life insurance amount that is sufficient to cover these costs. 

It’s possible to take out more coverage, of course, but that will result in a higher premium. Before you finalize how much of a life insurance policy you wish to take out, it’s important to know what your options are. 

Which Is Best for the Unborn Child? 

While there are many types out there, your primary two options are term life insurance and whole life insurance. Each comes with its own particular strengths, and different policies may be better suited for different lifestyles and budgets. 

  • Term life insurance is more affordable than whole life insurance policies, and the payout is usually larger. As the name implies, this insurance lets you specify a specific “term” (such as 10 years) for the  policy. However, term life insurance has no cash value component. 
  • Whole life insurance is more expensive and has smaller payouts, and it’s designed to cover someone for life (which is why these policies are sometimes referred to as “permanent life insurance”). Additionally, such policies build up cash value over time, and you may eventually be able to borrow against the value or get the entirety of it by giving up your policy. 

Parents of young children are typically better off getting a term life policy for themselves and their children because of the better payouts and better flexibility. For example, term life insurance lets you specify a very short term of coverage, which is great if you are worried about your child developing health issues. Just keep in mind that some carriers may forbid term insurance for children, so it’s important to find a life insurance carrier you can trust. 

Get the Best Life Insurance Today! 

Now you know why you should start the paperwork to add your baby to your insurance before birth. But do you know where you and your child can get the most reliable coverage at the best prices? 

At InsureOne, we’re here to protect you and your family. We are always ready for you to get a quote online. Alternatively, you can pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to come into one of our convenient nearby offices whenever you have a question.