Why Would You Get Life Insurance on a Child?

No parent wants to imagine anything terrible happening to their child. So I have just two important points to make, and then we can move on to lighter topics, deal? Okay.

• Typically, employers offer about three days off work for bereavement. Three days. I understand that everyone grieves differently, but three days is not enough. If the unthinkable happened, would you have enough money saved to take the time off work that you truly need?
• Times have been tough economically, and the reality is that many families simply do not have the savings to cover an unexpected funeral. Losing a child is devastating enough without the added stress of figuring out how to pay for a meaningful goodbye.

Beyond those difficult realities, the biggest reason families choose life insurance for children is actually about the future.

• Life insurance rates increase with age, so locking in a policy early means securing a much lower rate. What costs very little now could become a much bigger financial burden later in life.
• If a child is diagnosed with a medical condition, even one that is not life-threatening, it can affect their ability to qualify for life insurance as an adult or increase the cost significantly. Starting a policy early helps protect them from that risk.
• Some policies also offer added benefits, such as the ability to increase coverage at certain milestones in adulthood without needing to requalify. That means their insurance can grow with them as they take on adult responsibilities.
• Whole life and universal life policies build cash value over time. As adults, your child can borrow against that value instead of relying solely on traditional loans. With a larger plan, that cash value has even more opportunity to grow.
• There are also payment options that allow the policy to be fully paid off by the time your child reaches adulthood, while the coverage continues for the rest of their life and keeps earning interest.

For the cost of one less toy or a few coffees each month, you can help set your child up with a long-term financial safety net and give yourself added peace of mind.