Starting your family? Here's some information new parents need to know about life insurance and how it can help protect themselves and their children.
Article: 4 minutes
Updated: May 5, 2026 Published: May 8, 2023
By: Mikel Van Cleve, Ph.D., CFP® Reviewed by: Editorial contributors
Information courtesy of USAA Life Insurance Company and USAA Life Insurance Company of New York.
Ensuring that your loved ones are cared for is a priority for most parents, especially new parents who suddenly find themselves with added responsibilities. One of the most effective ways to protect your family financially in the event of your passing is by having life insurance.
Whether you're preparing to add to your family or you've just had your first baby, one thing is certain: The early days of parenthood can be exhausting, and there's probably a lot on your mind. Whether you've adopted a child or are in the midst of late-night feedings and diaper changes, you might also be thinking about your finances.
Many new parents, both stay-at-home parents and working parents, share that feeling of financial stress. For good reason: The average cost of raising a child is more than $325,000, according to an inflation-adjusted estimate of the U.S. Department of Agriculture's report. Since 1960, the USDA has been tracking the cost of raising a child through the age of 17.
How would your family cover those expenses if something were to happen to you or your spouse? One of the best tools you have to protect your loved ones' financial well-being is life insurance. In the event of a parent's death, life insurance can cover final expenses and contribute to all the costs associated with raising a child, including their college education, which isn't included in the USDA's estimate.
And, just knowing that you own a life insurance policy can go a long way toward your peace of mind because you know you're doing all you can to protect your family.
Video Duration: 2 minutes 34 seconds
Description of visual information: [Information Courtesy of USAA Life Insurance Company and USAA Life Insurance Company of New York] End of description.
Whether you're a new parent or getting ready to grow your family, you've got a lot on your mind. And finances are likely a part of that. Not only are you budgeting for diapers and daycare, but you may also be worrying about topics you've never thought about before, like: What would happen to my family's finances if I were to die unexpectedly?
This is where life insurance comes into play. It can help add peace of mind and financial security for the family you're building. As a new parent, getting life insurance is often easier than you may think. To start, you may review employee benefits that you or your spouse have available.
Often employers will offer some form of group life insurance for little to no cost. In many cases, though, that's not enough. So, you'll still have to buy a stand-alone policy to get the full protection you need.
There are two main types of life insurance policies: term policies and permanent policies.
If you're just starting out, a term policy may be your first consideration. Term policies provide simple life insurance protection in exchange for affordable premium payments. The premiums either increase yearly or stay level for a set duration. You'll be covered until you reach the age where the policy expires or you decide to cancel coverage.
On the other hand, permanent life insurance is coverage that's meant to last a lifetime. Although your premiums may be higher, you'll have coverage that's there for old age and can build cash value. Both options typically include a child rider, which offers added protection for your kids. If your budget allows, you can also set up a stand-alone life insurance policy on your child.
How much life insurance should you get?
Consider the LIFE acronym:
L: Liabilities.
How much money would it take to pay off all your debts?
I: Income.
How much of your income will your family need to live comfortably after you're gone?
F: Final expenses.
How much should be set aside for the funeral and any final medical expenses?
E: Education goals.
How much would your children need to pay for their education goals?
No one knows what the future holds. With life insurance, you can rest easy knowing that your family will be protected. Call us at 800-531-LIFE (5433) to learn more about our life insurance products.
Description of visual information: [Visit usaa.com/life to learn more or call 800-531-LIFE (5433).
This material is for informational purposes. Consider your own financial circumstances carefully before making a decision and consult with your tax, legal or estate planning professional.
Life insurance and annuities provided by USAA Life Insurance Company, San Antonio, TX and in New York by USAA Life Insurance Company of New York, Highland Falls, NY. All insurance products are subject to state availability, issue limitations and contractual terms and conditions. Each company has sole financial responsibility for its own products.
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If you're shopping for a life insurance policy as a parent, you have plenty of options.
Start with your employer. If your company will let you opt in for free coverage that's included in your benefits package, you definitely want to take advantage of that.
In most cases, that's not enough.
You'll also want to purchase a stand-alone policy, which will help give you the protection you need and will remain in place, even if your employment situation changes.
Policy types include term life insurance, permanent life insurance or a combination of the two.
Term premiums either increase annually or stay level for a certain period. As long as you pay your premiums, your coverage stays intact until the policy's scheduled expiration date, or until you decide you no longer need insurance.
Then there's permanent life insurance. It offers a potential for lifetime protection, as well as cash value accumulation. Although the premiums can be higher compared to a term policy, the cash value can be an added benefit.
Both life insurance options may offer a small amount of protection for any children in the household. This add-on is called a child rider, and may come with an additional cost.
Depending on your financial priorities you may also want to consider setting up stand-alone life insurance policy on your child. Insuring your children now can help protect their future insurability and get them off to a solid financial start.
When you choose life insurance, you want to be sure the death benefit will meet your needs. Not sure how much life insurance you need? For guidance, try our life insurance calculator.
The LIFE acronym can also help to determine how much you need:
Liabilities: How much money would it take to clear your family's debts?
Income: How much money would it take for your family to meet their current monthly expenses if they lost your income or had to replace your contributions to the household?
Final expenses: Consider funeral costs, final medical expenses or other cash needed to help with immediate costs after your death.
Education goals: How much would your children need for future education expenses?
Consider whether there are any funds currently available for your family to offset these needs. This can be existing savings or other life insurance policies.
Explore your life insurance options, get a quote and apply for coverage.