Buying Life Insurance for Children
First, we understand that even thinking about the death of a young person – especially your own son or daughter – can be painful. Many parents do not even try to overcome this fear in order to evaluate life insurance coverage. We have children, too, and we understand that no parent ever wants to think about the worst ever happening to their precious babies.
Yet as soon as your family welcomes a new addition, you will frequently be inundated with advertisements from specialized insurance companies that sell life policies to cover babies and young children. Naturally, these advertisements make it sound as though having such a policy is practically a requirement for good parenting. While of course that is not the case at all, it may be worth your time and money to set aside the uncomfortably painful thoughts and at least consider purchasing coverage for your child.
Inexpensive Investing, Plus Coverage
Buying a policy for a young person is incredibly cheap because of course, younger people are likely to be in good health and have a low chance of ever collecting a payout on their insurance. Starting a whole life one for an infant or child can be a way to invest and save for the future, especially when you consider that over 18-20 years, the small amount you set aside in the fund can be expected to grow significantly. However, most financial professionals recommend using a policy as one of several ways that you are saving for the future. It should not be your only savings.
Insurance for Later On
If medical problems like diabetes, heart disease, and other issues run in your family, term coverage for your child is much more crucial to have. As your children age and reach the years in which they will be earning the most income (and therefore, needing the most insurance), they may find themselves carrying a disease that makes them virtually uninsurable. Experts recommend buying as much as a million dollars in coverage on a 20 year policy so that when the time comes, the coverage is already there and can be renewed without a medical examination. The cost should be low, since insuring young people typically is, and it can give your son or daughter great peace of mind should s/he ever become ill.
Instead of carrying a million dollars from the beginning, you may also choose minimal coverage which allows you to upgrade to as much as $280,000 in adulthood, without a medical evaluation. Our agents can help you find appropriate coverage.
Cover Yourself First
Despite this all being good advice about when a policy may be good for your child, you should absolutely not even consider purchasing one unless you and your child's other parent already have sufficient coverage on yourselves. That is a far more important – and urgent – use of your money, as providing for financial losses after a death is the real purpose of life insurance, far beyond investing and planning for future needs.
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