Are you ready to be a parent?

It's the million-dollar question. Are you ready to be a parent?

Many issues come up for consideration when contemplating parenthood – your age, finances, relationship status, career objectives, educational aspirations and family size.

A report from AMP and the National Centre for Social and Economic Modelling (NATSEM) in 2013 looked at the cost of raising children in Australia across all income groups and found that middle-income families had the biggest increase in costs, spending up to 50 per cent more than in 2007. According to NATSEM, the cost of raising two children for a middle income family to the age of 21 in Australia is around $800,000.

Two things you can get a handle on prior to having a baby are your insurance policies and finances.

Health insurance

Even if you already have private health insurance, it’s important to know that obstetrics is not covered in every health insurance policy in Australia and that a 12-month waiting period can apply if you are a new customer or have just moved to a cover that includes obstetrics.

In Australia, health insurance can only cover you for in-hospital services. So, most medical expenses during pregnancy – including GP and obstetrician visits, scans and blood tests – will not be covered by your health insurance until you arrive in hospital to have your baby. They will (in part) be covered by Medicare.

It’s also important to check that your baby is covered from birth, in the event that they may require hospital care immediately. A premature birth or admittance to the Special Care Nursery or Intensive Care Unit can be very costly.

Life insurance

Life insurance can be another important consideration. Paying mortgage costs, bringing up children and paying for everyday household expenses may be a real struggle for your loved ones if you’re no longer there to provide for them. Family Life Cover from Real Insurance provides a lump sum cash payout to your family if you’re diagnosed with a terminal illness or pass away.1

While reviewing your policies, it’s a good idea to update your superannuation and life insurance beneficiaries too.


Before your baby arrives, it’s a good idea to use your free time to claim for government assistance (you won’t have much free time afterwards!). You can claim Parental Leave Pay up to 10 weeks before your baby’s expected date of birth or adoption. Also, ask your employer about your paid leave entitlements including parental leave, recreation or annual leave, long service leave and unpaid leave.

Parental Leave Pay provides financial support for up to 18 weeks to help eligible parents take time off work to care for a newborn or recently adopted child. The current 2015 rate of payment is $641.05 per week before tax. Family Tax Benefit is a two-part payment that helps with the cost of raising children. Dad and Partner Pay provides for an extra two weeks of pay for eligible dads and partners at the rate of $641.05 per week, before tax.

You could also be entitled to other benefits including Child Care Benefit, Parenting Payment, Rent Assistance or a Health Care Card. The Department of Human Services can provide an estimate of payments for your family. They can also be contacted on 13 61 50.

Once you’ve had your baby, Child Care Benefit can help with the cost of long day care, family day care, occasional day care, outside school hours care, vacation care, certain pre-schools, kindergarten and childcare provided by relatives, friends or even nannies. The Child Care Rebate covers 50 per cent of out of pocket childcare expenses, up to a maximum amount per child per year, in addition to the Child Care Benefit.

Be prepared if you take time off work to look after your baby you might experience a drop in your household income, while at the same time having new baby expenses. Try to focus on the essential items including: the pram, high chair, cot, change table, baby food, nappies and clothes. Many of these items can be bought second-hand or borrowed from family or friends.

Becoming a parent is an exciting life milestone. We hope our tips can steer you in the right direction, but encourage personal research to find the best options for your family.

Life insurance could also provide peace of mind for young families. If you are starting a family or growing an existing family, they may depend on your finances. With rent or a mortgage, school fees, childcare and everyday living expenses, you can help to protect your family financially if you were no longer around to support them. Consider the benefits of Real Life Insurance for those with young families. Explore your life insurance options today. 


1 Excludes suicide in the first 13 months. Diagnosis of a terminal illness with life expectancy of less than 12 months.

This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.