How much life insurance do parents need?

Having children changes how much life insurance you need. Parents or soon-to-be parents need enough coverage to cover their income plus future expenses like tuition and childcare.

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Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

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Kristi Sullivan, CFP®

Kristi Sullivan, CFP®

Certified Financial Planner

Kristi Sullivan, CFP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, she was a regional consultant at Fidelity Investments for nine years.

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Whether you're family planning, just had a child, or already have children, a life insurance policy is a critical piece of financial protection. The payout will support your kids, your spouse, and any other dependents if you're not around to — and that applies to stay-at-home parents, too.

Because every parent doesn’t have the same income and expenses, every parent doesn’t have the same life insurance needs. Here’s how to decide how much life insurance you need for your child, no matter how old they are.

Key Takeaways

  • Include anticipated childcare costs in your coverage in addition to your own income, expenses, outstanding debts, long-term care, and funeral expenses.

  • Buy life insurance before your second trimester or at least three months after delivery to get better rates.

  • Stay-at-home parents need life insurance to replace your contributions to the household and can usually get coverage based on your spouse's policy.

How much life insurance should parents buy?

Since life insurance exists to replace your income and cover expenses for your dependents after you’re gone, those expenses influence how much life insurance coverage you need. Experts recommend buying coverage equal to at least 10 to 15 times your annual salary.

Where you fall in that range depends on your:

  • Savings

  • Mortgage and other debts

  • Everyday spending

  • Anticipated future childcare expenses

  • End-of-life expenses (like funeral expenses)

  • Long-term-care expenses

If you’re having trouble figuring out how much coverage you need, a Policygenius agent can walk you through the calculations and the best options for your family. There are several types of life insurance, but term life insurance — which lasts for a set number of years before expiring — is the simplest choice for most people.

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Life insurance for new and expecting parents

New parents need more life insurance than parents of older children because they have more expenses ahead of them. Estimated costs for raising a child over 18 years are over $284,000. [1]

On top of childcare, health insurance, and a mortgage, your coverage should account for day-to-day child-raising expenses like:

  • Clothes

  • Camp or extracurriculars

  • Diapers

  • Food

  • Toys

  • Tuition

If you’re planning for a baby, it's best to buy coverage before you get pregnant to ensure that you’ll be covered if something happens during childbirth.

Once you’re already pregnant, it’s best to either apply during your first trimester or wait until a few months after you’ve delivered. Otherwise, any pregnancy-related weight gain or complications can impact your rates.

Life insurance for stay-at-home parents

Some people assume that only the primary breadwinner needs life insurance, but parents who either don't earn an income or who aren't the primary breadwinner make important non-financial contributions to the home.

Tasks like housekeeping, childcare, food preparation, and homework help would all need to be replaced by a hired professional or by the surviving parent. Unless one spouse’s income could easily cover these expenses, stay-at-home parents should have coverage too.

Stay-at-home parents who don't make an income can usually get covered by their spouse's insurance company. The policy's coverage amount will be based on their spouse's policy.

Life insurance for parents with teens

Your expenses may not have changed much as your children got older, but you may have more assets. If you've started saving for retirement or paid off more of your mortgage, you won't need as much coverage as a new parent.

But if your kids are older and you’ve only just started saving for your retirement or their college, you have a lot of ground to cover. Take into account how much you’ll be able to put toward college savings every month or year and how much of your life insurance death benefit needs to go toward that goal.

If you still have a lot of saving to do, college costs can eat up a lot of the death benefit, leaving little room for other expenses. The good news, especially if you have teens, is that you may only need coverage for 5 to 10 years.

Life insurance for empty nesters

Once the kids move out, your coverage needs depend on your age and expenses and less on your child's needs.

Safeguard your retirement

Even if you have fewer dependents when the kids have flown the nest, you still have a major one: your spouse. It’s great if you’ve been saving for retirement with IRAs or 401(k)s, but if you’re only, say, 50 when you become an empty nester, you still have at least a decade’s worth of saving and compound interest to take advantage of.

The death benefit allows your spouse to continue saving even if you pass away young and can no longer contribute to your retirement fund.

Make sure the nest is really empty

Don’t discount the safety net you’ll need until you’re sure your nest is absolutely empty. It’s not uncommon for kids to move back home after they graduate college, so that can add some unexpected expenses to your budget.

You might also have other dependents who rely on you and your income at this point in your life, like aging parents or other elderly relatives. Though their own long-term care insurance can help cover the costs, if you're supplementing that with your own money, you need to factor those expenses into your life insurance calculations.

Everyone’s life insurance needs will be different at different points in their lives. Let a life insurance agent can help you find the right policy and coverage amount for any stage of the parenting journey.

Frequently asked questions

How much life insurance do you need for a child?

We don't recommend buying life insurance on a child. Instead, ensure your own coverage accounts for their expenses, school tuition, and care in addition to your debts and income.

How much life insurance do stay-at-home parents need?

Stay-at-home parents should have enough life insurance to replace their contributions to the household with hired assistance, including childcare, cleaning, and cooking.

Do you need life insurance after your kids move out?

Parents may still need life insurance after their children become adults. Evaluate how much you still need to save for retirement and whether you'll be supporting your parents to find out how much coverage you need.