When you become a parent, your child depends on you to keep them safe and ensure they have everything they need to live a happy and healthy life.

You might be busy navigating a host of important decisions and responsibilities in your new role as parent, and one of them might be whether or not it’s a good time to consider getting - or reviewing your existing - life insurance.

What are some reasons for families to consider life insurance?

Life insurance can help your family stay afloat financially and help ensure your tamariki are taken care of if you were no longer there to support them. It will pay a lump sum to your family or estate, which can ease the burden of paying expenses such as your rent or mortgage, living costs and childcare.

For many parents, having a plan for how their young children will be taken care of if they pass away can provide a lot of peace of mind. A financial adviser will be able to talk to you about how life insurance can be used to ensure your children are taken care of if you were no longer around.

Some of the things a financial adviser might discuss with you is what expenses you currently have and whether your whanau would be able to cover these expenses on their own if you weren’t around. Or vice versa.

Does life insurance work for your family’s budget?

Having children can introduce all new financial pressures into your life. While you may have decided you want life insurance, one of the main questions you might have is how to fit it into your budget.

There is no one size fits all approach to choosing or structuring life insurance cover.

A financial adviser will help you balance cost, amount of cover and how to structure it in the most effective way for your unique situation.

Some of the things to consider are how much debt you have, what bills and living expenses you would leave behind, how would you want your children cared for and educated.

Which parent should get life insurance?

Often new parents will be reduced to one income if one parent chooses to stay home and care for the new addition to the family. If you’re in a situation where your family is financially dependent on the income of a sole working parent, it may make sense to insure the working parent.

But it’s also important to consider how losing a caregiver would impact your family. Would someone else need or want to stop working to take care of your child? Would you have family support, or would you need to pay for childcare?

It’s worth thinking through different scenarios to understand how much insurance you might need to cover the contributions of each parent or caregiver.

It’s always a good idea to talk to a financial adviser if you’re considering taking out or changing your life insurance. Your adviser will be able to talk you through your options and help you decide the right level of cover.