Life Insurance For Kids
While opinions vary, life insurance for kids offers some very real advantages. Parents who opt to take out policies for infants and children under the age of 21 may not be as unreasonable as some would believe. Some policies, such as whole life, can be converted to cash for a college education, disability, or to cover chronic healthcare needs in the event that the child becomes uninsurable in later years. Companies which promote insurance for babies point out the fact that whole life policies serve as long-term savings and the possibility of infant or childhood accidents or illnesses leading to eventual death are very real.
No parent likes to consider having to handle burial expenses for a child; but life insurance for kids can provide money for final expenses without placing a burden on family finances. Funeral expenses can easily cost $10,000, plus the cost of a burial plot and residual healthcare expenses in the case of terminal or long-term illnesses. Because of the reality of infant or adolescent death, concerned parents will also want to insure that their children accept Jesus Christ at an early age. "Then were there brought unto Him little children, that He should put His hands on them, and pray: and the disciples rebuked them. But Jesus said, Suffer little children, and forbid them not, to come unto Me: for of such is the kingdom of heaven" (Matthew 19:13-14).
Most policies for children are relatively inexpensive, amounting to less than pennies per day. Coverage can consist of hundreds of thousands of dollars and cash values can amount to considerable sums in a relatively short period of time. An average policy for $100,000 worth of coverage can cost a piddling $15 per month. Because premiums increase with the age of the child, the advantage to purchasing policies for children at an early age or even at birth are that premiums are small and highly manageable, even for young families with several siblings. By the time a child reaches college age, the same policy can cost two to three times at the same face value. For instance, that $100,000 policy purchased after the child turns 21 years old could easily cost conservatively $50 to $60 per month and up. For cost savings alone, many families view purchasing life insurance for kids as a wise investment and a smart option.
Families with several offspring may find that premiums for each of the children may amount to much less than the cost of adult life insurance. And some parents tend to view life insurance for kids as more of an investment for the future than preparation for untimely final expenses. With money invested in a whole life policy, adult children could cash in not only for college, but also to provide an investment to purchase a new home or start a business. Parents of middle income families aren't born with silver spoons in their mouths; and policies which provide coverage for kids can offer a reasonable amount of financial security for later years as an adult. Whole life policies can even be cashed in and converted into high yield stocks and bonds for even greater returns, or deposited into long term savings instruments, such as U.S. Treasury bills or certificates of deposit.
Those who oppose purchasing life insurance for kids point out that money could be best spent for other things, such as dental bills or everyday living expenses. Many reason that instead of purchasing a whole life or term policy, parents would be better off depositing those same funds into an interest-bearing savings account, money market, or mutual fund. Individuals who tend to oppose buying life insurance for kids may also have a problem dealing with the possibility of the death of an underage child. No one likes to consider the fact that children can and do die. Chronic illnesses, such as cancer, muscular dystrophy, or multiple sclerosis claim the lives of infants, toddlers, and teens. Many times, parents are unable to cope with long-term health problems which can deplete them emotionally and financially. However, in the event that chronic illnesses end in death, such policies can help alleviate the crushing financial obligations associated with extensive hospital stays, costly treatments, and expensive medications. Without adequate coverage, the financial burden of long-term, debilitating illness would only increase the emotional burden of losing a beloved child. And many families experience years of monetary woes while trying to recover emotionally from their loss.
In the final analysis, purchasing life insurance for kids is solely at the discretion of individual families. Parents should take time to discuss these kinds of sensitive issues without getting emotional or distraught. And as parents, taking on the responsibility of preparing for life's victories and disappointments is part and parcel of childrearing. No matter whether families decide to invest a small amount today for a brighter future for their child tomorrow, the most important consideration is that Moms and Dads make that very important choice together.
Parents may be wise to view the decision to purchase life insurance for kids as not only a viable, low-cost investment in their children's financial future, but also an assurance that the loss of a child can be faced with hope, closure and the possibility of securing a better life for surviving siblings. Insurance policies for coverage in amounts totaling hundreds of thousands of dollars could be used to enhance the quality of life for a child's surviving parents, brothers and sisters. The loss of offspring can be devastating, but the provisions made for those who live on after God calls His beloved little ones home can bring a measure of comfort and financial security.
Life Insurance For A ChildLife insurance for children provides monetary benefits for burial and other expenses, in the event of the death of a child. This has long been a topic of debate among financial planners and insurance professionals. Exploring the effective worth of coverage for a child is hard to justify according to some planners. For other financial experts, life insurance for a child is a reasonable purchase among other types of policies, if the consumer knows how to purchase the most beneficial plans. This is not a big purchase item in the country, accounting for only about 15% of those under eighteen who are covered. Most people holding these plans typically will purchase a policy amount for around $5,000.
Most companies offer some sort of coverage for children and the policies can be added to a consumers current policies within the same company. The individual may also purchase life insurance for a child outside their existing provider. Purchasing life insurance for children is relatively inexpensive compared to adult policies, but it is advisable to know the purpose in purchasing this coverage and to what advantage the parents wish it to serve. Many parents simply purchase a small policy to provide for any burial costs in the event of a childhood tragedy.
There are other reasons for purchasing this coverage of course, such as to provide cash out value to be used for college tuition. Also, in cases where genetic predisposition may cause likely health problems for a child, such as diabetes, some parents choose to purchase life insurance for a child so that he or she can continue with coverage while an adult. Conditions such as diabetes make it difficult for anyone diagnosed with the disease to purchase policies after the illness presents itself. Providing life insurance for children with high risk inherited genetics may insure coverage in case of developing the illness.
It is advised that parents should carry much more coverage on themselves than they do for their children, at any rate. If parents are considering purchasing life insurance for a child as an investment for their future, they should keep in mind that they will probably need to purchase more expensive coverage than the typical $5,000 policy in order for it to really help the child's future. There are many issues to consider when purchasing life insurance for children and anyone interested can receive more information at many websites that explore this option. "The Lord preserveth the strangers; he relieveth the fatherless and widow..." (Psalm 146:9a)
Juvenile life insurance is frequently an emotional purchase by parents hoping to secure "protection" for their child, but may not be the most sound fiscal decision. That said, nearly 2 million policies were sold in 2005, with three main features: death benefits, cash value, and a guarantee of future insurability. The concern is that, no matter what the premiums cost, teen life insurance may be less valuable than the same money applied to parent coverage. Refusing this coverage might allow the purchase of more protection for the head of the household. If so, buying a policy may be a factor in underinsuring the breadwinner, especially when considering that the odds of a child age 18 or younger dying. Thankfully, it is low; only one in 3,000 children die according to industry reports.
Death benefits sound helpful--if one can even think in terms of their child dying. But if the premiums average $213 every year, consumers should determine how much more coverage they would gain if that same money were applied to term life insurance for a healthy adult. It might be in the tens of thousands of dollars, compared to juvenile life insurance. In the long run, it will be far more helpful to protect children by insuring their parents rather than purchasing coverage. Some adult life policies will offer riders that will provide death benefits to all children in the family to help cover funeral and burial costs. If a rider is available on an adult plan, it wouldn't be prudent to purchase separate policies for each child. Some juvenile life insurance guarantees future insurability: a promise that a child will never be denied coverage even if he faces a chronic disease. Again, the likelihood of a child being denied treatment in a family health plan is remote enough to make one reconsider the value of paying 18 years worth of teen life insurance. Mark 13:37 says "And what I say unto you I say unto all, Watch."
If this seems like an easy way to establish a childhood savings account, keep in mind that the premium includes a commission to the agent whose company also gains from using that money in investments. The return on investment (ROI) is so low that most other investment options sound far better upon inspection. Juvenile life insurance is a package that appears beneficial, but is buoyed more by emotion than financial wisdom. According to LIMRA, an insurance and financial services research association, 40% of 48 million households believe they do not have enough insurance. One fourth of the parents in the study believe that they don't have a solid plan in place to provide a decent standard of living if they were to die tomorrow. While teen life insurance might feel like an investment a "good" parent would make, it may be far less valuable than investing in the parents themselves.