Income protection for new parents
Having a child dramatically increases your financial responsibilities. Income protection is arguably the most important insurance a new parent can have — replacing 50–70% of your income if illness or injury prevents you from working, for as long as you need it.
Why IP is especially important for new parents
- A new baby significantly increases your monthly outgoings
- Childcare costs continue whether you're working or not
- Your partner may not be able to increase their hours to compensate
- Parental leave may have reduced your savings buffer
Income protection for stay-at-home parents
Income protection isn't only for employed earners. A stay-at-home parent who cannot care for children due to illness or injury would need to pay for childcare — a significant cost. Some IP policies are available for non-earning parents on this basis. Speak to a whole-of-market adviser for options.
How much IP do new parents need?
Calculate your essential monthly outgoings as a family: mortgage/rent, childcare, food, bills. IP replaces 50–70% of gross income. Ensure the benefit amount covers your share of these costs without your partner's income.
Frequently Asked Questions
Some insurers offer cover for stay-at-home parents based on the cost of replacing the childcare and household services they provide. This is a specialist area — a whole-of-market adviser can identify the options.
Both parents' financial contributions matter — whether through income or childcare. Protecting both means the family is covered whichever parent is unable to fulfil their role.