When my husband and I had our first child, we knew we had to make some important financial moves to ensure the well-being of our growing family. We boosted our savings, started a college fund for our child with a 529 plan, and purchased a term life insurance policy. These measures gave us peace of mind and the security we needed to face the future confidently.
A few years later, we were blessed with the arrival of twin girls. Once again, we found ourselves in a situation where we needed to strengthen our financial position. However, this time it was a bit more challenging as we were also paying for child care for our son. We continued to prioritize saving money and opened additional 529 plans to save for our children’s college education. Unfortunately, one aspect of our financial planning fell through the cracks — increasing our life insurance coverage.
While it is generally recommended to secure enough life insurance to replace your salary 10 times over, we made the decision to buy less coverage for me. The main reason was that we had structured our finances in a way that allowed us to cover our essential expenses on my husband’s income alone. My income was used for things like savings, our kids’ activities and programs, family outings and vacations, as well as the occasional convenience of streaming services and takeout meals.
Furthermore, since I am self-employed, my income is variable, making it difficult to rely on it for essential bills. Although my workload has become more stable in recent years, when I first had my son and then my daughters, it was not as consistent. This uncertainty made us feel the need to ensure we could cover our basic expenses with my husband’s salary alone.
Another consideration was the fact that I wasn’t sure how I would feel about being a stay-at-home mom. We wanted to keep that option open in case we decided it was the right choice for our family. In the end, I continued working full-time and never exercised the option to become a stay-at-home mom. Nevertheless, having the option available provided me with peace of mind.
Given these factors, we decided not to increase my life insurance coverage even after the birth of our daughters and the associated increase in expenses. We believed that the coverage we already had was adequate for our needs, and going through the process of applying for more coverage seemed unnecessary.
Ultimately, the decision of whether or not to boost your life insurance coverage after having children depends on your individual circumstances. If expanding your family involves significant financial changes, such as moving to a larger home with a much higher mortgage, then increasing your coverage might be necessary. In our case, we didn’t take on a new mortgage and were comfortable with the amount of coverage we had based on our expenses.
If you’re unsure whether to adjust your life insurance after having children, take a close look at how the change is impacting your household’s finances. Evaluate the coverage you already have and consider whether your growing family’s expenses warrant an increase. If you find that you are spending significantly more each year and adding a substantial amount to your household debt, it may be worth exploring life insurance quotes and assessing the cost of boosting your coverage.
Every family’s situation is different, and it’s essential to make financial decisions that align with your unique circumstances. With careful consideration and a comprehensive understanding of your needs, you can make the right choices to ensure the financial security of your growing family.