7 changes to make to your insurance when you have a child

If you just welcomed a child into your life, there are a million things to do. Updating your insurance policies probably isn't at the top of the list, but from homeowners insurance to life insurance, you'll need to make changes to keep pace with your new phase of life and ensure your family's security for years to come.

Here are seven updates to make to your policies when you start a family.

Your health insurance will be crucial to covering your baby's many appointments in their first year of life. If you have health care through work, reach out to human resources or visit your benefits portal to add your baby to your policy.

Giving birth and adopting are both considered "qualifying life events," which means you're entitled to make changes outside of the standard open enrollment period. 

"Your baby should automatically be covered for the first 30 days on your existing policy, but you need to officially add them during this period so that they are insured moving forward," Regina McCann Hess, a certified financial planner at Forge Wealth Management, told CNBC Select in 2025.

If you have a partner who has their own health care, you can pick the one that best suits your needs and budget.

If you get coverage through the ACA Health Insurance Marketplace, you'll need to buy additional coverage. If you have Medicaid, your baby is automatically enrolled for the first year.

Life insurance is the best way to ensure your family's financial stability if the worst should happen.

No one wants to think about death, especially their own, McCann Hess said, but once you have a family, "you need to plan for the possibility."

"It doesn't have to be an elaborate or fancy policy," she added. "You can use term insurance to get the job done."

According to McCann Hess, life insurance isn't just necessary to replace a breadwinner's income.

"Some people assume that the caregiving spouse who stays at home doesn't need a policy," she said. "I disagree. You'll have to get someone to watch your kids while you are at work—or maybe full-time. And, unlike your spouse, they aren't going to do it for free."

There are many different life insurance plans on the market, but term life is a straightforward and affordable option for new parents. It's only in force for a certain number of years, usually between 10 and 30, but it can serve as a safety net during your child's most vulnerable years, when your income and caregiving are most critical.

A $500,000 20-year term life insurance policy for a 30-year-old woman averages $18.90 per month, according to Policygenius. For a 30-year-old man, it would be $22.59 a month.

A whole life insurance policy, in comparison, would cost upwards of $200 per month.

One of our top picks for term life insurance is Ladder, because it allows you to increase or decrease your death benefit as your life changes. If you own a car or house, Amica has affordable premiums and a healthy discount of up to 30% on auto, home and umbrella policies when you add life insurance.

You might think you're covered if you have group life insurance through your job. Employer-sponsored policies usually only pay out the equivalent of one year's salary, however, and the golden rule is to have at least 10 times that amount.

Even if you did take out a policy on your own, it probably doesn't reflect your current needs.

"Consider your current lifestyle, your child's lifetime educational needs, and your spouse's financial needs in case you aren't around," said McCann Hess.

If your existing policy has a guaranteed insurability rider, you should be able to increase coverage at life milestones, such as the birth of a child, without undergoing another medical exam.

No one wants to think about something terrible happening to their child, but a child's life insurance policy can help cover medical expenses and funeral costs. It also ensures they're eligible for coverage when they're older, even if they develop a disqualifying health condition or take up a risky job or hobby.

Children's whole life insurance policies also have a cash value component that grows over time. Later in life, if they keep the policy current, the cash value can be withdrawn, borrowed against or used to help pay premiums.

You can typically get a policy for a baby 14 days after birth, with the usual medical exam requirement waived. Our top picks for children's life insurance include Aflac, one of the few companies with term life policies for children, and Foresters Financial, which has a Bright Future Children's policy that pays out up to $75,000.

While life insurance may be top of mind, it's more likely you'll be disabled during your working years than pass away. According to the Social Security Administration, one in four U.S. workers in their 20s now will become disabled before they reach full retirement.

Disability insurance can help ensure you'll have enough money to keep your household running if you're unable to work for a period. Short-term disability provides income if you're temporarily unable to work due to a covered illness, injury or medical condition. It can last up to six months and is often (but not always) provided by employers.

"Will it fully cover all of your lost income?" McCann Hess said. "No, but hopefully it will help you pay some of your household expenses and provide some financial stability while you are disabled."

If you're self-employed or don't have coverage through work, a short-term disability policy from online marketplace Breeze can replace up to 60% of your weekly income for up to two years.

Long-term disability insurance replaces up to 70% of your income for as little as two years or up to the remainder of your working life. It's especially helpful if you've invested time and resources in a highly trained career in medicine, law or another field.

The Standard and Guardian both made our list of the best long-term disability insurance providers.

If you've made upgrades to your home in anticipation of your new arrival, it's time to bump up your homeowners insurance's dwelling coverage.

And, if you purchased an SUV to shepherd your little one around, revisit your car insurance policy and see if you're still getting the best deal. State Farm offers a multi-vehicle discount of up to 20% off.

Bundling auto and home insurance is a great way to save money. Amica, for example, offers discounts of up to 30% off if you purchase both home and auto policies.

Your life is expanding, so make sure your coverage does too. Liability protection pays out if you or someone in your household unintentionally causes damage to someone or their property. An umbrella insurance policy supersedes the limits on your home and auto policies, providing an extra layer of protection.

Travelers offers affordable umbrella insurance policies worth up to $5 million that can also cover attorneys' fees, medical bills and other expenses.

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Certified Financial Planner Regina McCann Hess of Forge Wealth Management in Malvern, Pennsylvania, in August 2025.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every insurance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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