Life Insurance for Children: Should You Buy One or Not?

In most cases, the decision to purchase any insurance product is straightforward. More so, some types of insurance such as medical coverage are important in all stages of life. However, buying life insurance coverage isn’t that easy, especially for a child.  Most parents find themselves embroiled in a debate on whether to buy this type of insurance.

Most people who are inclined towards buying life insurance say that it improves the insurability of the children as they grow up. Furthermore, they see it as a prudent decision just in case something unfortunate happens to their children.

Life insurance for kids is seen as a viable method of dealing with the financial implications that may arise from such a scenario.

Nonetheless, some of the financial advisors think that it’s ridiculous to invest in life insurance for a kid. Instead of buying this kind of insurance, they say the money could be used for other investment goals. Some of it could also be used as an inexpensive emergency kitty for children.

Life Insurance Coverage for Children

Children’s life insurance comes in two forms; term life insurance and whole life insurance coverage.

Term life insurance

This is a life insurance cover that lasts for a chosen number of years; it could be a decade or more. Nonetheless, it can be prolonged by paying an additional amount of money.

This coverage is much cheaper than the whole life insurance. The best bit about it is that it is offered by most established insurance companies.

Whole life insurance

This is a popular choice for parents or guardians who decide to purchase a life insurance cover for their kids. Whole life insurance means that a child will be covered for as long as they live. Typically, the premiums grow as the child grows. When the kid becomes an adult, the parents can pass on the ownership of the coverage. The kid may continue paying the premiums or the parents if they so wish.

What are the benefits of children’s life insurance?

In the unfortunate event that you happen to lose your child, this cover provides you with financial support. Normally,  the insurance company pays for the medical bills and covers for the funeral costs. In addition, if the parents are unable to work for a certain period of time after the loss, their expenses are catered for.

Some of the illnesses that children develop later in life may restrict them from getting a medical cover. However, if the child has life insurance, it is much easier for them to get a medical cover as an adult.  This is simply because adults can convince an insurance company to sell them a medical cover based on the life insurance that they already have.

The cash value for a child’s life insurance keeps growing as the years go by. This money can come in handy later in life for various reasons, including their college education.

The disadvantages of children’s life insurance

The rate of children’s death is low. Hence an emergency fund is likely to cost less and still help you through unfortunate incidences. A Memorial plan also gives better value for money compared to lifelong insurance coverage for children.

There are better ways to invest in and get better returns instead of paying premiums for your children through a life insurance policy. Furthermore, this money could be used to cater for your child’s immediate needs. The rest can be invested to help out with college education later in life.

The chances of an adult being restricted from obtaining a medical cover are relatively low.  In fact, the family history of an adult can be used to help get a medical cover.  Therefore, life insurance coverage for your child is not necessary when it comes to a medical insurance cover.

What to consider before purchasing a life insurance cover for your kids

Examine your budget to ensure that you have enough money at your disposal to pay for the premiums.

Seek financial advice from a professional who is not connected to any insurance corporation.

It is also important to have your own life insurance coverage as a parent before getting it for your children.

Depending on your financial abilities and priorities, you can decide whether a life insurance cover for your child is the best way to go or not.