Life insurance for new parents
Becoming a parent can be a joyful time, but it’s also a good time to start thinking about life insurance.
With the new financial responsibilities that come with having children, a life policy for parents can be a wise choice to protect your growing family.
After all, raising a child can be hugely rewarding, but there’s no getting around it – children are expensive! If you’re new to parenthood, the costs you’ll need to factor into your budget may come as a shock.
A 2024 report by Child Poverty Action Group (CPAG) found that the cost of raising a child until they reach 18 is £260,000 for a couple, and £290,000 for a single parent.
Best life insurance for parents
The “best” type of life insurance for you and your family will depend on your circumstances and how much cover you need (and can afford).
If you’re looking for ways to protect your family, you might be confused by all the options out there.
It’s important to consider if you want to take out a single or joint policy, level or decreasing term and whether you want to add critical illness cover for you and/or your child.
Read on to find out more about the types of life insurance available.
Single or joint life insurance for new parents?
At Beagle Street, we offer both single and joint life insurance.
Joint life insurance is an alternative to getting separate single life insurance policies. It covers both people on the same policy, and will only pay out once the first person passes away within the policy term. Because of this, it’s often cheaper than having two single policies.
A joint life insurance policy, with one payout, could be a good option to cover a mortgage or shared debt.
If you think you’ll need two separate payouts, which is more common if you have a child or dependents, then it might be best to have separate single life insurance policies.
Level or decreasing term life insurance?
We offer two different types of life insurance at Beagle Street – level and decreasing term life insurance. Both policy types are “term” products, meaning they only last a set amount of time.
However, they pay out different amounts if you die within the policy term.
Level term life insurance
Level term life insurance will pay out a set agreed sum if you die during the policy’s term. This is generally best for paying fixed costs such as household bills or funeral costs, or if you want to leave your family a cash lump sum when you die.
Your payout and your premiums will not change throughout the length of your policy (unless you make changes to your policy).
Decreasing term life insurance
With decreasing life insurance, the payout amount goes down throughout the policy term, but your premiums stay the same throughout the policy term (unless you make any changes).
It typically offers cheaper monthly payments because the value of the policy decreases. It’s often used for paying off debts which get lower over time, such as a repayment mortgage.
Having a child can often be a trigger to buy a home. This typically involves taking out a mortgage, which can become the household’s biggest ongoing expense. You might want to make sure you have enough protection in place to pay off your shared mortgage if you die, reducing a big financial burden for your co-parent.
Critical illness cover
You can also take out critical illness cover when you get a life insurance policy with Beagle Street.
Beagle Street’s critical illness cover pays out a lump sum if you’re diagnosed with any of the specified illnesses covered by your policy. This includes certain types of cancer, heart attack or stroke. You can find the full list of conditions listed in our policy terms and conditions.
Critical illness cover payouts are often used to cover mortgage or rent payments, and medical or care costs, as well as for making adaptations to your home and paying for any unexpected expenses. This could reduce the financial strain on your family during an already tough time.
Children’s critical illness cover
As a new parent, you might consider taking out children’s critical illness cover. This can help you cover time off work or medical costs if your child becomes seriously unwell.
You can add children’s critical illness cover to your critical illness cover with Beagle Street.
This covers your current children and any future children, and pays out if they are diagnosed with a serious illness such as cancer, heart attack or stroke. You can see the full list of conditions covered in our policy terms and conditions.
How much cover do new parents need?
You’ll need to consider a number of factors when deciding how much life insurance to take out:
- The costs your family will need to cover. This could include paying off your mortgage or covering rent payments, debt, bills and everyday living costs.
- The type of life insurance you take out. You might decide to take out a decreasing term policy, where the cover decreases as your debt reduces. Or you might opt for a level term policy so your family get a fixed amount if you die.
- How much you can afford to pay in premiums. If you can’t afford to pay the premiums comfortably then it may be a good idea to reduce the level of cover you take out. Ultimately, some insurance is better than no insurance at all.
Find out how much life insurance could cost with Beagle Street
Our simple, online quick quote tool will let you know how much cover you can get and how much it’s likely to cost you. There’s no commitment to take out a policy.
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Terminal illness cover vs critical illness cover
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What is accidental death benefit?
Accidental death benefit acts as short-term cover while you’re waiting for a decision on your life insurance application. This can reduce financial stress on you and your loved ones during that time.
What is joint life insurance and how does it work?
Our joint policies will pay-out once only, on the first person who passes away and a claim is made within the policy term.