parents
Life insurance for new parents
- No cost
- No obligation
- Licensed independent professionals
- You choose when to talk
At a glance
- What it is
- Life insurance for a set period: 10, 15, 20, 25 or 30 years
- Who it is for
- People with a mortgage, children, or income others depend on
- Price
- Usually the lowest cost per dollar of coverage while the term runs
- After the term
- Coverage ends, renews at a much higher price, or converts to permanent coverage if the policy allows
The number that matters for new parents
Add the years of income you want replaced until the youngest child is independent, plus the mortgage and education. Subtract what you have. For many young families the result is several hundred thousand dollars, and a 20- or 30-year term policy covers it for a manageable monthly premium while the children are young.
Insuring a stay-at-home parent
A parent without a paycheck still has an economic value: childcare, transportation, household management. Replacing those services can cost tens of thousands of dollars a year. Term coverage on the at-home parent is inexpensive and commonly overlooked.
Why coverage through work is usually not enough
Employer group life is typically one or two times salary, is not portable when you leave, and can end at retirement. It is a helpful base, not a plan. An individual policy you own goes with you between jobs and can be sized to the actual need rather than to a benefit formula.
Choosing an amount and a term
A common approach is to add up what you want covered (remaining mortgage, years of income to replace, education, final costs), subtract what you already have (savings, employer coverage, Social Security survivor benefits where they apply), and match the term to the longest obligation. Someone with a 27-year mortgage and a toddler often looks at 30 years; someone five years from paying off the house may look at 10.
Common questions
Should the baby be the beneficiary?
No. Minors cannot receive life insurance proceeds directly; a court would appoint a guardian for the money. Name your spouse, or a trust for the child with a trustee you choose. An attorney can set this up simply.
Is a child rider worth adding?
A child rider adds a small benefit for each child at low cost and usually converts to a standalone policy at adulthood. It is a reasonable add-on after the parents are covered, not a substitute for covering them.
What happens when my term life insurance ends?
Coverage stops, or renews year to year at a much higher price if the policy has a renewal provision. Some policies let you convert to permanent coverage before a deadline without a new medical review.
Is a medical exam required for term life?
Not always. Many carriers offer accelerated underwriting that uses your application answers, prescription history and other records instead of an exam, often up to a set coverage amount. Health questions still apply.
Is the death benefit taxable?
Life insurance proceeds paid because of the insured’s death are generally not included in the beneficiary’s gross income for federal tax purposes. Interest earned on proceeds left with the insurer can be taxable. A tax professional can address your situation.
Is AskLily an insurance company?
No. AskLily is an education and referral service. Lily, our automated assistant, helps you understand options and, when you ask, connects you with a licensed independent insurance professional. AskLily does not sell, bind or underwrite coverage.
Does it cost anything to talk to Lily or a licensed professional?
No. There is no fee to use AskLily, ask Lily questions, or speak with a licensed professional we refer you to. If you decide to apply for a policy, you pay premiums to the insurance company that issues it.
Talk it through with Lily
Ask what this means for your situation. When you want numbers or an application, Lily connects you with a licensed independent professional.
- No cost
- No obligation
- Licensed independent professionals
- You choose when to talk
Lily is an automated assistant, not a licensed agent. She explains options in plain language; quotes, recommendations and applications come from licensed independent insurance professionals.
Sources
- NAIC Life Insurance Buyer’s Guide (accessed 2026-09-06) - Term life definitions, renewal and conversion features
- IRS, Life insurance proceeds (Topic: are the proceeds taxable?) (accessed 2026-09-06) - Life insurance death proceeds generally excluded from gross income
- Social Security Administration, Survivors Benefits (accessed 2026-09-06) - Survivor benefits for children and caregiving spouses
AskLily is an insurance education and referral service, not an insurance company or agency. AskLily does not sell, bind or underwrite coverage. Content is general information, not advice for your situation; consult a licensed insurance professional. Last reviewed 2026-09-06.