New Parents: 9 Money Moves for Your Baby’s First Year (2026)
Last updated: 13 October 2026
Quick answer: The key money moves for new parents are: add the baby to your health policies within the insurer's window, since many plans cover newborns only from day 91; raise term cover to include the child's needs; write wills that name a guardian; rebuild the emergency fund after delivery costs; and start an education SIP early. Starting at birth, about ₹13,000 a month could build ₹1 crore in 18 years at 12%.
Last updated: 13 October 2026 Quick answer: The key money moves for new parents are: add the baby to your health policies within the insurer's window, since many plans cover newborns only from day 91; raise term cover to include the child's needs; write wills that name a guardian; rebuild the emergency fund after delivery costs; and start an education SIP early. Starting at birth, about ₹13,000 a month could build ₹1 crore in 18 years at 12%. Key takeaways Maternity benefit: 26 weeks of paid leave for the first two children under the Code on Social Security, 2020. Newborn cover: check whether your policy covers the baby from birth or only from day 91. Term cover: in our example, a new father needs about ₹86 lakh more. Will: only a will lets you appoint a guardian for a minor child. Education: waiting until age 10 makes the SIP for ₹1 crore nearly five times larger. A baby rearranges everything, including the household budget. In the same few months, one income may pause, hospital bills arrive, monthly costs jump and, for the first time, someone depends on you completely for the next two decades. This guide sets out the new parents money moves that matter most in year one, for salaried families in Pune and elsewhere. It covers statutory maternity benefits, delivery costs and health insurance for the newborn, how much extra term cover you need, wills and guardianship, budgeting and the child's education goal, with rupee examples and current rules as of October 2026. What maternity benefits are you entitled to in 2026? Maternity benefit is paid leave with wages that employers must give eligible women employees around childbirth. Since 21 November 2025, it is governed by the Code on Social Security, 2020, which absorbed the Maternity Benefit Act, 1961. According to the PIB factsheet on the Code (https://www.pib.gov.in/FactsheetDetails.aspx?id=150473) : Duration: up to 26 weeks, of which up to 8 weeks can be taken before the expected delivery. A woman with two or more surviving children gets 12 weeks. Eligibility: at least 80 days of work in the 12 months before the expected delivery. Pay: average daily wage for the period of absence. Adoption and surrogacy: 12 weeks for a mother adopting a child under three months, or a commissioning mother. Medical bonus: ₹3,500 if the employer does not provide free pre-natal and post-natal care. After return: two nursing breaks a day until the child is 15 months; work from home where the job permits and both sides agree. Crèche: establishments with 50 or more employees must provide one, or pay an allowance of at least ₹500 a month per child for up to two children. An employer cannot dismiss a woman during her maternity absence, except in narrow misconduct cases. There is still no statutory paternity leave for private-sector fathers; some IT firms offer it as policy, so check yours. Maternity pay is taxed like normal salary. Maternity benefit rules for new parents under the Code on Social Security 2020 How much does having a baby cost, and what does insurance pay? Delivery costs vary widely between hospitals, between normal and caesarean delivery, and with any NICU stay. Ask your chosen hospital for a written package estimate for both types of delivery, and compare it with your policy's maternity limit well before the due date. Group cover: usually the best maternity cover you have Employer group policies often include maternity cover without the long waiting periods of retail plans, but with a fixed sub-limit for delivery. If both parents have group cover, check which is better and whether claims can be split. Note the deadlines for adding the newborn; they are often short. Retail plans: waiting periods and newborn cover If you rely on a retail policy, maternity benefits usually start only after a waiting period that can range from nine months to four years, as Zurich Kotak's explainer (https://www.zurichkotak.com/knowledge-center/health-insurance/maternity-coverage-in-indian-health-insurance-what-expecting-parents-should-know) notes. That is why our newly married checklist (/insights/newly-married-financial-checklist) suggests buying early. Newborn cover is the trap many parents miss. Some plans with a maternity benefit cover the baby from birth, usually within the maternity limit. Many standard floaters accept a child only from 91 days of age, leaving NICU bills in the first three months to you, as Ditto's newborn cover guide (https://www.joinditto.in/articles/health-insurance/health-insurance-for-new-born-baby/) explains. Plans that do cover newborns typically require you to add the baby within about 90 days. New parents health insurance: newborn covered from day one versus from day 91 Before delivery: read the policy wording on "newborn", "entry age" and "maternity sub-limit". After birth: inform HR and your insurer, with the birth certificate, within the stated window. At renewal: raise the family floater sum insured. ₹10 lakh plus a super top-up (/insights/super-top-up-health-insurance) is a sensible minimum for a Pune family of three. Claims: keep every bill and discharge summary; our cashless and reimbursement claims guide (/insights/health-insurance-claim-cashless-reimbursement) covers the process. Premiums for your spouse and children count within ₹25,000 under section 126 of the Income-tax Act, 2025 (https://www.incometaxindia.gov.in/w/section-126-92) (old 80D), in the old regime only. Our section 80D guide (/insights/section-80d-health-insurance-deduction) has the full limits. How much term insurance do new parents need? A child turns term insurance from "nice to have" into essential. The cover should pay off loans, replace the income the family would lose until the child is independent, and fund the child's education. Each earning parent needs their own policy; a parent on a career break may also need cover for the cost of replacing their work at home. Take Ankit, 33, in Kharadi. His wife has paused work for a year. The family spends ₹70,000 a month, he owes ₹55 lakh on his home loan, and they want ₹30 lakh in today's money for their daughter's education. Needs method Amount Family expenses: ₹8.4 lakh a year for 15 years ₹1.26 crore Outstanding home loan ₹55 lakh Child's education (today's value) ₹30 lakh Total need ₹2.11 crore Less: existing term cover ₹1 crore + investments ₹25 lakh ₹1.25 crore Gap ₹86 lakh: buy ₹1 crore more This simple version assumes investment returns roughly match inflation on the expense stream. Group life cover from an employer is not counted, because it ends when the job does. Since 22 September 2025, individual life insurance premiums carry no GST, which makes adding a second policy cheaper than before. Our term insurance guide (/insights/term-insurance-advisor-pune) explains the needs method in detail, and term cover for homemakers (/insights/term-insurance-for-homemakers-women) covers the parent at home. Term insurance needs calculation for new parents showing the cover gap after a baby Consider taking the new policy under the Married Women's Property Act so the proceeds go to the wife and children and stay beyond creditors' reach. Accident and disability cover are cheap add-ons worth a look; see our guide to personal accident and disability insurance (/insights/personal-accident-disability-insurance) . Why do new parents need a will? A will is the only document in which you can name a guardian for your minor child if both parents die. Without one, relatives may have to go to court, and the child's inheritance may be managed by someone you would not have chosen. Name a guardian and a backup , after asking them. Name an executor to carry out the will. Say how the child's share is held until 18 or a later age, for example through a trustee. Update nominations so a minor nominee has a named guardian or appointee on policies and accounts. Our guides on how to write a valid will (/insights/how-to-write-valid-will-india) and estate planning in India (/insights/estate-planning-guide-india) explain witnesses, registration and common mistakes. How should you budget for the first year with a baby? Budget for two kinds of cost: one-time costs around the birth (hospital costs above the insurance limit, equipment, vaccinations) and new monthly costs (nappies, formula if used, childcare, higher medical spending). If one parent takes unpaid leave or a career break, the bigger change is the drop in income. Model the lower income for the months of unpaid leave or a career break, before the baby arrives. Raise the emergency fund to six months of the new, higher expenses. See our emergency fund guide (/insights/emergency-fund-guide-india) . Keep retirement SIPs going even if smaller; the years you skip are the most expensive to replace. Avoid new debt for baby purchases, especially on credit cards. Our budgeting guide (/insights/budgeting-guide-india) helps rebuild the monthly plan, and if one partner is stepping away from work, financial planning for homemakers (/insights/financial-planning-for-homemakers-and-women) covers keeping their own savings and cover in place. How much should you save for your child's education? Education costs in India have risen faster than general inflation. If a professional degree costs ₹25 lakh today and costs rise 8% a year, the same course would cost about ₹1 crore in 18 years. Our explainer on inflation and the future value of ₹1 crore (/insights/inflation-value-of-1-crore-future) shows the effect. Start saving Years to 18 Monthly SIP for ₹1 crore at 12% At birth 18 ₹13,064 At birth, stepped up 10% a year 18 ₹6,937 to start At age 5 13 ₹26,601 At age 10 8 ₹61,909 The 12% return is an assumption for a long-term equity portfolio, not a promise. Move money steadily into debt in the last three to five years so a market fall does not hit the fees. Our child education planning guide (/insights/child-education-planning-guide-india) and protecting an education corpus (/insights/education-planning-3-to-5-years) cover the glide path, and step-up SIPs (/insights/step-up-sip-calculator-guide) explain the step-up maths. Child education SIP calculator for new parents: monthly SIP needed by starting age Which products suit a child's education goal? Option Key feature (as of October 2026) Watch out for Equity mutual fund SIP (flexi cap, index) Growth engine for 10+ year goals; liquid Market risk; needs a de-risking plan Sukanya Samriddhi Yojana (/insights/sukanya-samriddhi-yojana-guide) Girl child under 10; 8.2% tax-free for Oct–Dec 2026 ₹1.5 lakh yearly cap; 50% withdrawal only from 18 PPF in the child's name Tax-free; parent's and minor's deposits share one ₹1.5 lakh limit 15-year lock-in Life cycle funds SEBI's new goal-dated category with a glide path New; check the target date and costs Child plans from insurers Premium waiver on parent's death Often high costs; compare with term + SIP Income on investments in a minor's name is generally clubbed with the parent's income, except for tax-free products such as PPF and SSY. Read our comparison of Sukanya Samriddhi vs mutual funds (/insights/sukanya-samriddhi-vs-mutual-funds-education) and the explainer on life cycle funds (/insights/life-cycle-funds-sebi-new-category) before choosing. The year-one paperwork checklist Birth registration: report the birth within 21 days and collect the birth certificate, which now serves as a key proof of date of birth. Aadhaar for the child (Baal Aadhaar), needed for many accounts and policies. Add the child to health policies, EPF family details and employer records. Update nominees on bank accounts, mutual funds, demat and insurance, appointing a guardian for a minor nominee. Keep hospital bills for claims, and premium receipts for tax. New parents money moves checklist for the baby’s first year Related reading Just married: a joint financial checklist (/insights/newly-married-financial-checklist) Child education planning (/insights/child-education-planning-guide-india) Sukanya Samriddhi Yojana: full guide (/insights/sukanya-samriddhi-yojana-guide) Insurance planning in India: term, health, life (/insights/insurance-planning-guide-india) How to write a valid will in India (/insights/how-to-write-valid-will-india) Laid off? A 90-day money plan (/insights/laid-off-money-plan-it-professionals) Frequently Asked Questions How many weeks of maternity leave do working women get in India? Under the Code on Social Security, 2020, in force since 21 November 2025, eligible women get up to 26 weeks of paid maternity benefit for the first two children, with up to 8 weeks before delivery. A woman with two or more surviving children gets 12 weeks. Adopting mothers of a child under three months and commissioning mothers get 12 weeks. Is a newborn covered under the mother's health insurance? Only if the policy says so. Some plans with maternity cover include the newborn from birth, usually within the maternity limit. Many standard retail floaters accept a child only from 91 days of age. Many group policies cover newborns, but confirm with HR. Add the baby formally within the insurer's window, often 90 days. Is there paternity leave for private-sector employees in India? There is no statutory paternity leave for private-sector fathers as of October 2026. Central Government employees get 15 days under service rules. Many private employers, especially in IT, offer paternity leave as company policy, so check your HR handbook. How much term insurance should a new parent buy? Add up family expenses until the child is independent, outstanding loans and the child's education cost, then subtract existing personal cover and investments. In our example, a 33-year-old needed about ₹2.11 crore in total and had ₹1.25 crore, so he should buy about ₹1 crore more. Do not count employer group cover. Can I start a SIP in my baby's name? Yes. A mutual fund folio can be opened in a minor's name with a parent or legal guardian, using the child's birth certificate as proof of age. Income is clubbed with the parent's income until the child turns 18. Many parents simply run the education SIP in their own name and earmark it. Should we buy a child insurance plan? Child plans combine insurance with savings and often have high costs and modest returns. Many families get better value from adequate term cover on each earning parent plus a separate equity SIP for education. If you are considering one, work out its real IRR and compare it with that combination first. Do new parents need to update their will? Yes. The will should name a guardian and a backup for the child, an executor, and how the child's inheritance is to be held until adulthood. Without a will, there is no way to appoint a guardian of your choice, and relatives may need a court order to manage the child's money. Sources: PIB: Code on Social Security, 2020 factsheet (https://www.pib.gov.in/FactsheetDetails.aspx?id=150473) ; Zurich Kotak: maternity coverage (https://www.zurichkotak.com/knowledge-center/health-insurance/maternity-coverage-in-indian-health-insurance-what-expecting-parents-should-know) ; Ditto: health insurance for a newborn (https://www.joinditto.in/articles/health-insurance/health-insurance-for-new-born-baby/) ; Income Tax Department: section 126 (https://www.incometaxindia.gov.in/w/section-126-92) ; section 99 (clubbing) (https://www.incometaxindia.gov.in/w/section-99-63) . Worked examples are Money n Wealth calculations. Expecting a baby or just welcomed one? Health cover, term insurance and the education plan work best when set up together. Talk to Money n Wealth (/contact) for an insurance review and a free portfolio review. This article is for general educational purposes only and does not constitute financial advice. Figures and examples are illustrative. Please consult a qualified financial adviser for guidance specific to your situation. Money n Wealth (Predics Fintech Services Pvt Ltd) is an AMFI-registered Mutual Fund Distributor (ARN-121995) and APMI-registered PMS Distributor (APRN07444); it is not a SEBI-registered investment adviser and may earn distribution commission on investments made through it. Insurance is the subject matter of solicitation.
Frequently Asked Questions
How many weeks of maternity leave do working women get in India?
Under the Code on Social Security, 2020, in force since 21 November 2025, eligible women get up to 26 weeks of paid maternity benefit for the first two children, with up to 8 weeks before delivery. A woman with two or more surviving children gets 12 weeks. Adopting mothers of a child under three months and commissioning mothers get 12 weeks.
Is a newborn covered under the mother's health insurance?
Only if the policy says so. Some plans with maternity cover include the newborn from birth, usually within the maternity limit. Many standard retail floaters accept a child only from 91 days of age. Many group policies cover newborns, but confirm with HR. Add the baby formally within the insurer's window, often 90 days.
Is there paternity leave for private-sector employees in India?
There is no statutory paternity leave for private-sector fathers as of October 2026. Central Government employees get 15 days under service rules. Many private employers, especially in IT, offer paternity leave as company policy, so check your HR handbook.
How much term insurance should a new parent buy?
Add up family expenses until the child is independent, outstanding loans and the child's education cost, then subtract existing personal cover and investments. In our example, a 33-year-old needed about ₹2.11 crore in total and had ₹1.25 crore, so he should buy about ₹1 crore more. Do not count employer group cover.
Can I start a SIP in my baby's name?
Yes. A mutual fund folio can be opened in a minor's name with a parent or legal guardian, using the child's birth certificate as proof of age. Income is clubbed with the parent's income until the child turns 18. Many parents simply run the education SIP in their own name and earmark it.
Should we buy a child insurance plan?
Child plans combine insurance with savings and often have high costs and modest returns. Many families get better value from adequate term cover on each earning parent plus a separate equity SIP for education. If you are considering one, work out its real IRR and compare it with that combination first.
Do new parents need to update their will?
Yes. The will should name a guardian and a backup for the child, an executor, and how the child's inheritance is to be held until adulthood. Without a will, there is no way to appoint a guardian of your choice, and relatives may need a court order to manage the child's money.
Expecting a baby or just welcomed one?
Health cover, term insurance and the education plan work best when set up together. Talk to Money n Wealth for an insurance review and a free portfolio review.
