New baby: the insurance moves that actually matter

Why a baby changes the math

Before kids, a modest policy might have covered your debts. Now someone depends on your income for roughly two decades, and on the unpaid work of running a household. That's why a new baby is the biggest single step-up in coverage need most families ever face — and a natural moment to get the whole picture right. Do these moves in the first few months.

Move 1 — Life insurance for both parents

Size coverage for the working parent using debts, income replacement, the mortgage, and the child's future costs, minus what you have. Then insure the stay-at-home parent too — replacing childcare, cooking, and household management has a real dollar cost that lands on the surviving parent. Term usually fits, because the need is temporary (it fades as kids grow and the mortgage shrinks). Run both numbers with the Life Insurance Needs tool.

Illustrative cost of what a stay-at-home parent's work replaces:

Move 2 — Check disability coverage

Your income now carries a dependant, so protect the income itself. Review your group LTD (percentage, cap, own-occ period, taxability) and consider personal coverage to fill the gaps. During working years, a disabling illness or injury is more likely than death — don't insure only the smaller risk. Size it with the Disability Gap tool.

Move 3 — Beneficiaries and a trustee

Update beneficiaries on your life insurance, group plan, and registered accounts. Most importantly, name a trustee (or set up a trust) for your children, so any payout is managed for them rather than handed over in a lump sum when they turn 18. See beneficiary designations. Underneath your own coverage, note that CPP pays a modest children's benefit (about $307.81/month in 2026) to a surviving dependent child — a floor, not a plan.

Move 4 — Will and guardianship

Insurance and your will work together. A new baby is the prompt to make or update your will and — the part only a will can do — name a guardian. Coordinate the guardian and the insurance trustee so the people raising your child have the money to do it.

Move 5 — Skip the baby-targeted junk

Child life insurance and "gift" whole life policies are heavily marketed to new parents and rarely belong near the top of the list. Insure the earners first. Buy child coverage, if at all, only after both parents are properly protected — and mainly for its guaranteed-future-insurability feature, not as an investment.

Your first-90-days checklist

1. Calculate and buy/adjust life insurance for both parents.
2. Review disability coverage and fill gaps.
3. Update beneficiaries everywhere and name a trustee for the kids.
4. Make or update your will and guardianship.
5. Decline the baby-targeted upsells until the basics are done.