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Having a new child touches every aspect of a couple’s life, including their finances. So, it’s important to understand how a newborn or an adopted child can affect a family’s insurance needs. The New York State Insurance Department suggests that new parents review these issues to make sure their insurance offers maximum protection:

Health Insurance

Understand your coverage before the baby is born or you adopt. Review coverage options and find out exactly how your health care plan handles the cost of a new child. Remember to consider prenatal vitamins, prenatal and new-natal screenings and tests, emergency procedures, delivery and pediatric care. Also, check your policy to understand your responsibilities. For example, your insurer may require notification of the hospital admission when your baby is born.

Notify your insurer of your new child. Make sure you are aware of the requirements to register your newborn with your health insurance company. If you are adopting, consult in advance with your employer and health insurance provider for the requirements to obtain health insurance.

Make use of tax advantages. See if your employer offers a flexible spending account or health savings account (HSA). These plans allow you to set aside pre-tax dollars for medical expenses and child care.

Life Insurance

Consider the responsibilities of both parents. Consider covering both parents with life insurance, even if one parent is not employed. Life insurance proceeds can help a surviving parent not only with expected financial expenses, such as a child’s education and medical needs, but also with unexpected expenses, such as child care that may become necessary.

Understand the types of life insurance. Understand your options and weigh the costs and benefits as part of your financial plan.

Permanent life insurance – These policies build cash value and pay a death benefit, but are more expensive than term policies. If you can’t afford one now, but may want one in the future, consider a term life policy with a conversion option. This will allow you to change to a permanent life policy when you are ready.

Term life insurance – This type of policy offers death benefit protection for a specified time period. Term life may be appropriate during your child-rearing years or while paying off a mortgage. Premiums generally increase as you age. Term life is typically less expensive in your younger years compared to permanent life insurance, which covers you for your entire life and typically has level premiums.

Auto Insurance

Plan for carpools. Consider increasing your liability insurance, including no-fault and supplementary uninsured/underinsured motorist coverage, in case of an accident when transporting other kids.

Homeowners Insurance

Notify your insurer of major additions. To avoid being underinsured, contact your insurance company when making home improvements which cost more than $5,000. Inform your insurer if you install any backyard items for children, such as a swing set or swimming pool, to protect yourself in the event someone is injured on your property.

Consumer Assistance

The New York State Insurance Department’s website,, offers extensive information about these and other forms of insurance. Consumers should contact their insurance company, agent or broker to get answers to specific questions about their policies. Consumers who need further help should feel free to contact the Department’s Consumer Services Bureau from 9 a.m. to 4:30 p.m., Monday through Friday toll-free at 800-342-3736.


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