Are Kids a Need for Life Insurance?

Are Kids a Need for Life Insurance?

Are children entitled to insurance? This is a subject that has been much debated.

Adults buy insurance to cover income loss due to death, but this is not the case for children. In the absence income-generating abilities, insurance for children seems ethically questionable, if not contrary to the basic of insurance.

Let’s look at a few reasons why parents buy insurance for their children. There may be some controversial reasons.

(a) Investment

Parents may purchase insurance for their children with investment motives. There are two camps that oppose the idea. One is for it and one is against. It is considered a good idea by the first. They consider it a good idea. However, the latter thinks it is a waste and should invest their money elsewhere. They believe that insurance costs and expenses have reduced the investment return.

(b) Education

Insurance was once a consideration for parents when they were planning to establish an education fund. Insurance is no longer a viable option for parents looking to build education funds for their children, especially when compared to other tax-advantaged schemes like 529 plans or Pre-Paid Tuition Plans.

(c) Burial

It is a terrible idea to get kids insurance policies for burial costs. This is something that a parent does not want to think about. Many parents don’t like the idea of their children getting life insurance. Even if they did, the policies they received were usually only sufficient to cover their last expenses. Parents cannot profit from the death of any of their children.

(d) Convenience

Many parents purchase life insurance policies for their children out of convenience. Parents who have purchased insurance for themselves often decide to include their children in the family package. Although these policies usually only provide a limited amount of coverage, parents might feel that they are fair to all members of the family because everyone is covered. A major selling point is that children are not required to have medical insurance.

(e) Future insurability

Guaranteed insurability is a better reason to get children life insurance. Even if the children develop serious illnesses later on, they will still have coverage.

If the family history is less favorable in terms of health, future insurance is particularly important. Parents may want to purchase life insurance for their children to ensure their future health and that of their dependents. Parents alone might not be able take on the financial responsibility of the children’s families.

Insurance may become a necessity at some point. This is especially true if we are borrowing money to buy properties. We need insurance to protect our collateral. The premiums are more affordable if you buy insurance early. As children, our parents purchased life insurance policies. When we become adults, the premiums that we pay for the plans are much lower than the premiums paid by our peers who take out life plans later in life. We can save a lot of money over the long-term by paying a lower premium.

(f) Creation and maintenance of property

Insurance policy is not viewed as a piece of property by many people. One person can have $100,000 of life insurance by paying a premium that is only a fraction the policy’s value. Life insurance, unlike other types of property, is very secure and doesn’t require much personal attention.

Parents can help their children create assets that could increase in value by getting them life insurance policies. Parents can consider life insurance for their children a gift of love.

(g) Charity

Life insurance is meant to be used click here for more details for those who are able to live. It is also known as life insurance. Parents are always saddened to learn that their child has passed away. We cannot bring your child back. The life insurance policy that covers the child’s life can be a lifesaver. To help others in dire need, the proceeds of the life insurance policy can be donated to charities in the child’s name. Even though the child may not live to see his or her final day, he/she can still help others have a better life.

Life insurance for children is not something that you need, but something you want.

Parents, as the breadwinners of the family, should prioritize their own protection and ensure that they are properly covered. They are the financial pillars of the family. It is not a bad idea to get life insurance for your children once you have enough protection. Children should have life insurance because they can be guaranteed future insurability.