Having a baby is a life-altering event. Lacking the proper health and life insurance can be, too. If you recently had a baby or are expecting, now is the time to re-examine your insurance needs.
You have (or soon will have) a new dependent who relies on your wages. As your baby's main -- or sole -- financial support, you need to insure against losses in the event of your death.
Calculating how much life insurance you need is the first crucial step. Financial advisers suggest a five-step analysis: Add up your short-term needs (final expenses, outstanding debts and emergency expenses), long-term needs (such as mortgage payment), education (dependents' college tuition) and family maintenance (child care, food, clothing, utility bills, insurance and transportation). Then subtract assets such as savings, stocks, bonds, mutual funds and other life insurance.
If you're divorced, you'd likely still name your ex-spouse because that person would care for your children in the event of your death. Don't name your minor children as beneficiaries: They cannot receive a life insurance benefit until they're age 18 unless you've set up a trust to hold the proceeds.
Add your baby to your health plan
Soon after your baby's birth, you should apply for the child's Social Security number. You'll need to list this number on your tax return in order to take the dependency exemption for the baby. Most hospitals make the arrangements, but if yours doesn't, call the Social Security Administration at 1-800-772-1213. Health insurance companies will also want your baby's Social Security number as soon as it's issued.You might have as little as 30 days after your child's birth to add him or her to your group health insurance plan. If you miss this deadline, your health insurer might require you to wait until the next annual open-enrollment period before you can add your baby to your plan. If your employer offers more than one choice of health insurance plan, open enrollment is a good time to evaluate your coverage and see whether it meets your expanded family's needs.
If you don't have health insurance through work, can't afford an individual health insurance policy and don't meet low-income rules for Medicaid eligibility, you may be a prime candidate for your state's Children's Health Insurance Program. (See "A survival guide for the uninsured.")
The Robert Wood Johnson Foundation reports many children who qualify for state programs that provide health coverage to low-income families are not covered because their parents don't know about these programs. Your state insurance department can tell you if you qualify for such coverage.
Continued: Bridge any insurance gaps
