Protecting your family's future

Adding a new family member in 2025?
Now is a great time to look at your options for life insurance.

Why should young families consider life insurance?

Life insurance can help your family stay afloat financially and help ensure your children are taken care of if you are no longer there to support them. The policy is designed to pay a lump sum to your family or estate if you pass away, which can ease the burden of paying expenses such as your rent or mortgage, living costs and childcare.

For many parents, having a plan for how their young children will be taken care of if they pass away can provide a lot of peace of mind. You can talk with a financial adviser about how life insurance can be used to support your family if you are no longer around. Some of the things a financial adviser can discuss with you is what expenses you currently have and whether your family would be able to cover those expenses on their own if you weren’t around. Or vice versa.

Does it fit in the budget?

Having children can introduce new financial pressures into your life. If you are considering life insurance, one of the main questions you might have is how to fit it into your budget. While there is no one-size-fits-all approach to choosing or structuring life insurance cover, a financial adviser can help you to balance cost - by assessing the amount of cover you may need and how to structure your cover in the most effective way for your individual situation.

Some of the things a financial adviser can discuss with you are how much debt you have, what bills and living expenses you would leave behind, and how you would want your children cared for and educated.

Which parent should get it?

Often new parents can be reduced to one income if one parent chooses to stay home and care for the new addition to the family. If you’re in a situation where your family is financially dependent on the income of a sole working parent, it may seem to make sense to insure the working parent. But it’s also important to consider how losing a caregiver would impact your family. Would someone else need or want to stop working to take care of your child? Would you have family support, or would you need to pay for childcare? It’s worth thinking through these different scenarios to understand how much insurance you might need to cover the contributions of each parent or caregiver.

Consider speaking with an independent insurance advisor to ensure your family is adequately protected, regardless of a parent’s employment status.

AALIFE.CO.NZ 

The information in this article has been compiled from various sources and is intended to be factual information only. Full details of AA Life Insurance policy terms and conditions are available from AALife.co.nz. For advice on product suitability, please contact your financial adviser. While we take reasonable steps to ensure that the information contained in this article is accurate and up-to-date, it is subject to change without notice and we cannot accept any responsibility or liability in connection with your use of or reliance on this article. AA Life insurance policies are brought to you by the New Zealand Automobile Association Incorporated (NZAA) and underwritten by Asteron Life Limited. Policies are subject to terms, conditions, exclusions, and limitations.