Updated: June 2025
Embracing the role of parenthood is not just about providing for your children today but making plans for their future. One of the most useful financial tools for long-term planning could be life insurance.
Life insurance helps provide financial security to your children and other family members in case you are a parent that passes away.
This article is going to shed light on why parents need life insurance, what the available policies are, how much coverage they should be looking at, and also how to begin.
👨👩👧 Why Parents Need Life Insurance
Whether you are staying at home with your kids or you are the breadwinner, your sudden absence can cause a significant financial shock to your family.
Some specific areas life insurance can help with are as follows
- Covering your children and spouse’s everyday living expenses
- Payment of school or daycare costs
- Paying the rent or mortgage
- Clearing debts and covering last expenses
- Future college expenses
🛡️ Life insurance is not only the concern of earners. Stay-at-home parents take care of a house and children; the cost of such work is too high to replace.
🧾 What Type of Life Insurance Is Best for Parents?
First, let’s talk about two main categories of life insurance:
✅ Term Life Insurance
- it provides coverage for a specific period (10, 20, or 30 years)
- Lower rates of premiums
- The period when kids are young and required is the target period for this kind of coverage.
A 35-year-old parent can illustrate this by getting a $500,000, 20-year term life policy for less than $30 per month.
✅ Whole Life Insurance (or Permanent)
- Provides coverage for a lifetime of an individual’s life
- Also works as a financial product that grows money over time
- Although it’s more expensive, it can become a valuable asset in the long run
Best for parents who wish to continue the insurance beyond the children’s upbringing period or leave an inheritance for them.
📊 How Much Life Insurance Do Parents Need?
One of the best practices is to buy coverage between 10 and 15 times your annual salary.
You need to add:
- The amount of the mortgage to pay off
- The number and ages of the children
- Financial security for college education
💡 If both you and your partner are working, you should also have a separate policy for yourself, even if one of you has a higher salary.
👶 Should You Insure Your Children Too?
While not a necessity, there is child life insurance available and, in most cases, it is very cheap. This way:
- It will take care of funeral costs is the worst case scenario
- The child life contract can be changed into an adult life policy in the future
- Life insurance remains effective even if health changes occur
For the most part, the one thing you will get out of it will be the comfort of knowing that your kids are well covered, even as they enter their adult lives.
💡 Tips for Buying Life Insurance as a Parent
- Get started early – later in life, the rates will surely go up with the risk of new health issues
- Shopping for insurance is a matter of getting price quotes from various insurance providers – It’s way easier to use sites like Policygenius or Ladder
- Don’t look to depend solely on the group policy of your job – It is pretty common that the first thing the workplace insurance coverage comes to an end is the moment you are no longer working there
- Be sure to follow up and confirm that your beneficiaries are still the same