The New Parent's Financial Checklist: Life Insurance and More

Are you "all systems go" or about to crash and burn? Checking the right boxes is easier than you think.

Whether this is your first or you're already talking about having another baby, there’s a lot to consider with a new child on the way. You’ve probably got the name covered, but the sooner you can check these other items off the list, the better. Most people don’t immediately jump from pregnancy test to thinking about life insurance, but being responsible for another human means thinking about how to protect them—both literally and financially. 

So along with popping those prenatal vitamins, you might want to start considering how else you can protect your future child. Whether that’s life insurance, a will or college savings, we’ll help you get started. Whether you're a single parent or teaming up with a partner to tackle these items, now's the time to focus on your financial priorities for what's to come.

Apply for Life Insurance

Estimated time - 10 minutes

Now that someone is depending on you, life insurance is an easy and affordable way to help ensure your family's financial security. Getting covered used to mean talking to an agent and waiting weeks. These days, Fabric makes it easy, letting you sign up for a term life insurance policy online, without needing to speak to an agent.

Here’s how life insurance works, in a nutshell: You sign a contract with an insurer saying that if you were to pass away while your policy is active and in force (meaning you’re up to date with your premium payments), the insurance company will pay your loved ones a certain amount of money. They can use this “death benefit” for whatever they need, including paying off debt, keeping up with mortgage payments, funding your final expenses, paying for a kid’s college education or anything else.

The main reason people get life insurance is to “replace” someone’s income, in other words to contribute financially the way that person would’ve if they were still alive. That said, life insurance is also important for stay-at-home parents because the working parent may need to take time off from their career, or pay for additional childcare or help around the house. 

You might’ve heard that your weight affects whether you can get life insurance and at what cost. That’s true, but shouldn’t be a reason to hold off on applying if you’re pregnant. Life insurance underwriters, or the people who figure out what kind of risk is associated with your insurance application, understand that it’s normal to gain weight when you’re pregnant. As a result, they account for weight gain related to pregnancy; if you’re having a healthy pregnancy, it’s possible you could get the same rate you’d have gotten if you weren’t pregnant. Here’s what you should know about applying for life insurance when you’re pregnant.

The online application through Fabric asks you questions about your health, personal life, finances, hobbies and more. Generally speaking, many people can fill it out in about 10 minutes. In terms of how long it takes to actually get life insurance, that varies from person to person. In some cases, you could be approved for coverage on the spot.

Ask About Employee Benefits

Estimated time - 15 minutes

Odds are your company has a parent-friendly program or two in place that was mentioned to you when you got hired, but didn’t make much of an impression at the time. Things like paid leave, unpaid leave and pre-tax child-care flex accounts are about to become more important. Now is the time to dig in and understand them all. You could easily save thousands in just the first year.

Set Up Health Care for Your Child

Estimated time - 30 minutes

The easiest and likely most cost-effective way to cover your child's healthcare needs is to add them to your existing insurance. Start by calling your current provider or the HR person at your office. Note: This must be done within 30 days of your child’s birth.

Get a Will

Estimated time - 10 minutes

It would be easy to put this one off indefinitely. Before a baby arrives, things are much simpler. With a child in the picture, the stakes are higher if you or your partner were to unexpectedly pass away. Without a will in place, your child could become a ward of the state or thrust upon a relative who may not be the best person for the job. (Here’s how to choose a legal guardian to take care of your child if something were to happen to you.)

Fabric can help you create a last will in less than 10 minutes, which you can make legally binding (in most states) by printing, signing and getting two people to witness. For inspiration, here are the choices that one real mom made in her will.

Create a Simple Budget

Estimated time - 60 minutes

Lots of things are about to change. Without a plan to follow, you could easily fall off track without even knowing it. In addition to all of the things you currently spend money on (rent, utilities, food, cell phone, clothing, entertainment, etc.), make sure your budget includes new lines for childcare, diapers, food and toys.

Open a 529 Account

Estimated time - 20 minutes

College is probably the single most intimidating financial hurdle for many new parents. But it doesn’t have to be. For example, putting away $125 per month and, assuming a 5 to 7% annual rate of return, you should have roughly enough to pay for a quarter of their education outright, assuming the cost for four years of tuition and fees at a private institution is $32,000 annually.

Once you've taken care of the financial to-dos, you can get onto what really matters—those amazing moments with your little one.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

Information provided is general and educational in nature, is not financial advice, and all products or services discussed may not be offered by Fabric by Gerber Life  (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. The views and opinions of third-party content providers are solely those of the author and not Fabric by Gerber Life.