SHOULD YOU CONSIDER LIFE INSURANCE FOR YOUR CHILDREN?

Some people are superstitious about insurance. They might be afraid to buy Life insurance for their children, just as some people are fearful to buy it for themselves. Others feel sure that nothing bad could ever happen to their children, so they avoid spending the money to insure a child’s life. The real truth is that there are reasons beyond the unthinkable to insure a child’s life. A good Life insurance policy, purchased when a child is young, healthy, and far from any negative events, can pay big dividends for the child later. (And, even though we hate to think the worst, how much more awful would it be to have financial stress added to the disaster of losing a child? Peace of mind can make life as a parent much easier, too.)

In fact, most of the reasons to insure your child’s life are really about ensuring that your child can have a long, happy, prosperous life, regardless of what he or she encounters in terms of illness or accident later.

Here are a few of the reasons to consider insuring your child:

  • Permanent Life insurance accumulates cash value, and that value grows tax-deferred. When the child is old enough for college, the cash could help pay for it. Or, it could help the child purchase his or her first home. If the policy was left untouched through those Life transitions, it could even help fund your child’s own retirement!
  • Buying Whole Life or Universal Life insurance now guarantees your children will not be without insurance later, when they are more likely to need it. Later in life, if they should develop an illness or sustain serious injury, it could be cost prohibitive, or even impossible, to obtain coverage.
  • Insuring a child’s life with Whole Life or Universal Life also means that the child’s coverage can continue regardless of military service, health conditions, or taking a college major in skydiving!
When you shop for Life insurance for a child, there’s still more to consider. For instance, you can make sure the plan you buy offers a rider to purchase additional insurance. With that option, at such specified times as marriage or the births of your grandchildren, your child may purchase additional insurance at standard rates, without reapplying. Such a rider generally offers the opportunity to increase coverage on a no-questions-asked basis.

Advances in the science of statistics, too, will more firmly establish the mortality rates of various physical conditions, hobbies, and professions. Your child becoming a member of any of those identified groups would also result in a premium hike, or the inability to purchase insurance at all.

When you purchase Life insurance for your child, your main intent -- especially if you are a young parent with limited resources -- might be to cover expenses you’d incur if you did lose a child to illness or accident. And that might be enough. But it’s also nice to know that there’s so much more that coverage can do to help ensure your child’s best financial future.
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