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Life Insurance With Multiple Children

Each new child brings added financial responsibilities. As your household changes, your life insurance coverage should be reviewed to keep pace.

Key Takeaways

  • Raising a child to age 17 costs approximately $310,000 (Brookings, 2022). Each new child increases daily expenses, financial dependence length and future costs like college.
  • A 20-, 25- or 30-year term policy can help financially protect children while they depend on you or while a mortgage and other major debts are still in place.
  • Review your policy after major life events (birth or adoption of a child) and at least every two years to ensure coverage still reflects your family's needs.

With the cost of raising a child to the age of 17 totaling around $310,000,¹ welcoming a new child may require reviewing your life insurance policy to make sure everyone is protected. If you’re thinking about life insurance with multiple children, this is also a good time to look at whether your current family life insurance coverage still fits your household.

After a baby is born, parents have many immediate concerns, but life insurance is an important part of financial planning.

Quick takeaway: Each new child can change your coverage needs. A policy that felt right with one child may not fully reflect a larger household, future education costs or a longer period of financial dependence.

How another child can affect your life insurance needs

Much like buying a home or changing jobs, welcoming a new baby – whether it’s a first, second or third child – is among the life events that should lead you to reassess your life insurance coverage. Taking the time to review your current policy and financial situation is one of the best ways to make sure your coverage is still doing what it’s intended to do: help provide financial security for your family.

Whenever you have these life events, or at least every two years, you should reassess what your life insurance needs are compared to what you have.

Here's how adding a child can affect your life insurance needs:

What may changeWhy it matters for coverageWhat to review
Another child joins the familyMore daily expenses and longer financial dependenceDeath benefit amount and policy term length
Plans for college or child care growFuture costs may be higher than beforeWhether your family life insurance coverage reflects those goals
Mortgage or other debt is still in placeYour household may need more time and income supportWhether term length aligns with your biggest obligations

Questions to ask when reviewing coverage

Financially preparing for the unexpected and creating a safety net while your children are still young may help them through each milestone of growing up, and that preparation begins with choosing the correct policy type.

Questions to ask when adding a child to your policy:

  • Does my death benefit cover daily expenses, child care and future education costs for all my children?  
  • Does my policy term length align with the years my children will be financially dependent?  
  • Do I have outstanding debts (mortgage, loans) that would need coverage if something happened to me?

Life insurance options for growing families

Whether you already own a policy and are looking to update it, or are thinking of purchasing life insurance, a 10-, 15-, 20-, 25- or 30-year term policy can help financially protect your children while they still depend on you. For many families thinking about life insurance multiple children needs, term coverage can be a practical way to match protection to the years when children are most financially dependent. Similarly, parents with a home mortgage or long-term loan should consider matching the length of the loan to the term of the policy when considering their needs.

If you want to compare how these options work, see learn more about whole life insurance and term vs. whole life and what is whole life insurance.

Life insurance for new parents

With all the expenses of having a baby, life insurance is sometimes overlooked. When you’re planning a family, you absolutely should look into getting life insurance. There’s no need to wait.

If life insurance is something you and your partner think you should have eventually, it may help to start now while you’re reviewing your household budget, your debts and the support your children would need if something happened to you.

If you’re not sure how much coverage to consider, learn how much life insurance do you need can help you think through income replacement, debt and future expenses. You may also find it helpful to review if you can have more than one life insurance policy if your needs have grown since you first bought coverage.

FAQs about life insurance with multiple children

Review your policy after major life changes, such as the birth or adoption of another child, and at least every couple of years to make sure coverage still reflects your family’s needs.

That depends on your income, debts, child care needs, future education goals and how long your children may rely on you financially. Many families start by reviewing income replacement and major household obligations.

It can be. Term life insurance may work well for families who want coverage during the years their children are most financially dependent or while a mortgage and other major debts are still in place.

Possibly. A new child can increase your daily costs and lengthen the time your family needs financial support. It's a good idea to revisit your policy and see if it still makes sense.

It's a good idea to check if your existing policy still matches your family's current needs. Some parents decide to keep their current coverage and add an additional policy instead of starting over.

Also of Interest

Future estimated annual expenditures of raising a child, assuming a higher inflation rate of 4 percent after 2020, Brookings, August 2022.

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ALIC83122 Jan-27

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