Is Life Insurance For Children Really Necessary?
Some parents are forced to get insurance policy for their children by the insurance salesmen. Some find it mandatory to do so when they get one for themselves. But – life insurance for children: is it a need? – This questions depends on two things: 1. The financial condition of parents and 2. The kind of benefit the children will get with the insurance policy. The two main insurance policies for children that can be taken are: * Whole life insurance * Term life insurance.
A children’s life insurance policy can be taken for a child who has a genetic medical condition be able to have insurance when he or she is older. Most insurance companies will try and sell insurance policies to parents claiming that a child’s life insurance policy is a must. Actually, this really depends on the type of policy, so do not get pressurized into getting one for the sake of doing so. The main reason why parents must consider getting a life insurance policy is if there will be future insurability problems.
Insurability problems may rise in future if the family has a history of medical conditions like heart disease, diabetes etc.,Getting life insurance policy for the children from such family background will be quiet expensive at the later stage of their life. It would be better for the parents to have insurance policy for such children at the earlier stage to avoid problems in future. Same policy can be continued in their adulthood. For such children, the most economic form of insurance will be to have a policy of twenty year term with the option of renewing it to a whole life policy after its maturity.
Obviously, parents will not be able to use any kind of benchmark to calculate how much their child will need by way of insurance. In such a case, using a parent’s salary level is the obvious way to go. If parents decide to go in for a whole life policy, then the child can continue with the policy even after the age of 18. Taking a term life insurance does not guarantee future insurability for the term life insurance has a fixed period. In fact, a term life policy for a child will not amount to anything when it expires. This is especially true for a majority of kids will probably outlive the term life insurance their parents take.
Term life insurance amounts can be used to pay for funeral expenses of the child or any outstanding medical bills. Some term life policies even make payments if the insured child gets disabled during the term. While term life will not allow a person to borrow against the amount, it is useful to repay outstanding debts or even pay for therapeutic costs for parents traumatized by the loss of a child. Of course, most parents will not want to consider the possibility of losing their child and hence may prefer not to take a term life policy.
Whole life policy is very much useful for those whose family is having genetic disorders. For the children with precarious medical condition that could manifest in the later stage of their life, whole life policy is an ideal choice. The money that comes from can be used for medical expenses and it also allows the parents to borrow against insurance which can be used for short term expenses life school fees. Most of the children will be the beneficiaries on their parent’s insurance policies. Hence most of the financial experts believe that insurance to children is not necessary.
In fact, instead of paying premiums on insurance policies, the amount can be used to open a savings account for children, which basically amounts to the same thing. This money can be then used for a child’s college expenses, medical expenses and such. With medical science improving in leaps and bounds, most people remain insurable well past the age of 80. The chance that a child will become uninsurable is relatively small, so parents need not really worry about taking life insurance for them.
Mutual funds or annuities are also better alternatives as parents can get good amount of money which can be used for all important expenses. This will be helpful to parents in spending money for their child’s every need. Don’t do some just for the reason that somebody is doing it. This is what experts say. Do what you really need to do. Consider your family conditions and go for insurance if it is really necessary.
Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on insurance term life and life insurance no medical, visit his site today.