A new child changes the arithmetic more than a new mortgage does. Cover arranged when you were two working adults with a mortgage rarely fits a household with dependants, reduced hours and childcare costs. It is the single most common moment when protection quietly stops being adequate.
What actually changes
The period you need cover for. Before children, cover typically ran to the end of the mortgage. Now it needs to run until the youngest is financially independent — often further.
Childcare becomes a cost of working. If one parent could not work, the household loses income and may still need childcare. If one parent died, the survivor might face full-time childcare costs or reduced hours.
Household income may have changed. Reduced hours, a career break, or one parent stopping work entirely. Both the income to replace and the ability to absorb a shock have shifted.
Affordability tightens. Lenders count dependants in affordability assessments, which matters at your next remortgage as well.
The parent who does not earn
The most consistent gap we see.
Households insure the higher earner, sometimes generously, and leave the parent doing most of the childcare uninsured because there is no salary to replace.
Consider what would actually happen. The surviving parent would need to fund childcare, or reduce their hours, or stop working. That is a substantial, sustained financial impact with no income attached to it.
The sum assured may reasonably be smaller than for the earner. It should not be nothing.
What to review
Life cover — amount. Add income replacement for the years until the children are independent, plus childcare and education costs. This is usually where the shortfall is.
Life cover — term. Check it runs long enough. A policy ending when the mortgage does may leave a gap if you had children later.
Joint versus single. A joint life first death policy pays once and ends, leaving the surviving parent without cover at the point they most need it. With children, two single policies are usually the better structure if affordable.
Income protection. Now protecting a larger household on a tighter budget. Check the benefit is still adequate and the deferred period still matches your sick pay and savings.
Critical illness. Most policies include children's cover automatically, but limits and conditions vary. Worth confirming what yours actually includes.
Trusts and beneficiaries. Update the beneficiaries to include new children. If your policy is not in trust, this is a good moment — see putting life insurance in trust.
Increasing cover without a new medical
A feature worth checking before you buy anything new.
Many policies include guaranteed insurability, allowing you to increase cover after certain life events — marriage, a new mortgage, or the birth or adoption of a child — without further medical underwriting.
That matters if your health has changed since you took the policy out. New cover would be underwritten on your health today; an increase under this option is not.
There is usually a time limit, often three or six months from the event, and limits on how much you can add. Check your policy documents now rather than later. This is one of the more valuable features people forget they have.
None of this happens automatically. The guaranteed insurability option sits in the policy, but the increase does not apply itself when a child is born — you have to contact the insurer within the time limit and ask for it, usually supplying a birth or adoption certificate as evidence. Households who assume cover simply grows with the family sometimes discover, only when a claim is made, that the increase was never actually requested. Diarise it alongside registering the birth.
The related admin
Two things that sit alongside protection and are worth doing at the same time:
Make or update a will. Particularly to appoint guardians for children. Life cover in trust says who gets the money; a will says who looks after the children. Both matter, and the second cannot be done through an insurer.
Check your employer benefits. Death in service and group income protection may have changed, and some employers offer additional cover on life events.
Do not cancel before the replacement is in force
If a review points to different cover, arrange the new policy first and let it be underwritten and started before cancelling anything.
A gap between policies is a genuine risk, and health can change at any time. Never leave yourself uninsured in between.
Talk it through
Bring your existing policy documents. We will tell you what you already have, where the gap actually is, and whether an increase under an existing option beats buying something new.
Call 0116 277 7536 or book a free consultation.
More guides: protection guides for Leicester.
