When a baby arrives, the to-do list explodes. Hospital paperwork, vaccinations, sleep schedules, switching to a bigger flat, finding the right daycare. In the midst of all of this, most new parents completely forget to update — or in many cases, create — their financial safety net for the very person they're now responsible for.
The mistake isn't getting the wrong type of insurance. The mistake is not getting any at all — or not updating an existing policy to reflect that there's now a child who depends on both parents' incomes entirely.
A new parent with no term plan is gambling with their child's future. A parent with a term plan that was sized for their pre-child lifestyle — and never updated — may be underinsured by 30–50%.
The second mistake is naming the child as a direct nominee without appointing a guardian (appointee) for that nominee. Minor children can't receive life insurance payouts directly — the claim gets complicated and may end up in a court-administered trust. The fix is simple: name your spouse as primary nominee and the child as contingent nominee, with a trusted appointee named.
New parenthood is overwhelming. But spending 20 minutes sorting your insurance situation is one of the most meaningful things you can do for that small person sleeping in the next room.