There are many opinions of whether or not it is good to buy life insurance for a child. Some people are against buying a policy; saying that the money can be put to use for savings for college. Some people are for buying a policy; believing that it is better to be prepared than to not be.
The truth is that many parents are not financially equipped to handle the funeral/burial expenses if their child suddenly passes away. If a child dies, extra strain will be put on the family to try to figure out costs/payments if no protection is put in place. This stress can be avoided.
Not all life insurance policies are the same. For the money-conscientious family, a policy with a small premium may be the best. For families that can afford to spend more, there are insurance policies with more flexibility.
When thinking about buying a policy parents should evaluate the following:
* Current financial situation
* Policy terms/premiums
* Pros/Cons of a life insurance policy for the child
Thinking about these things will help parents to make a more educated decision on whether to buy life insurance.
Parents should not gamble with insurance for their child just as they should not with themselves. Things happen and accidents occur and the “I was going to…” and “I meant to …” will not help after the fact.
I read an article that stated that if the child did not contribute any monetary value to the family, no policy may be needed because life insurance is supposed to supplement the loss of income. Yes, income supplementation is one aspect of it but not the only one.
I purchased a life insurance policy for my child. The policy stays with her for her life. In the beginning the premiums are fairly reasonable. As she grows older, the premium increases. When she turns 18 her policy benefit doubles, an when she turns 21 she can take over the policy and pay for it herself or cancel it.
When I purchased the policy I did not think of the benefit to me, but the benefit to her in the future if she has a family. I want her to be able to leave something to her family. One great benefit to the policy is that she never had to have a physical. Nothing about her would warrant a cancellation/denial of a policy. But what if there were? Would I want to go through the stress of trying to figure out which company would insure her? No. With the policy that she has now, she will still be covered if she should develop something that might cause another company to not pick her up on their insurance.
Also, I have insurance for her through my job. The job came after her first insurance policy. With changes in the economy my job may not be here 18 years from now. Therefore, I kept the original. Now I have a peace-of-mind knowing that she will be covered regardless of my working situation and that her original policy will be something that she can hold on to as she gets older.