It’s better to have it an not need it…
Have you ever heard that saying, “it’s better to have it and not need it, than to need it and not have it”? That’s true of a lot of things in life, and I think that life insurance for kids is definitely in that category.
Having life insurance for your kids is one of those things that you hope you’ll never need, and there’s a 99.-something percent chance that you never will. But if that very slight chance turns out to be a reality, then having the coverage will help on multiple fronts.
At a minimum, you want to be able provide your child with decent final arrangements. The average cost of a funeral today is around $10,000. If you do decide to buy life insurance for your kids, you should have at least that much coverage for each.
In addition, there could be lingering medical expenses. Even the best health insurance policy can leave you with deductibles, coinsurance payments and even uncovered medical procedures. These expenses can run into the tens of thousands of dollars and would be a strong argument for greater insurance coverage still.
Money to cushion the loss
Any time we experience the loss of a loved one we can go through an extended period of emotional adjustment. This would be especially true upon the loss of a child. It can take many months, and sometimes even years, before you will be functioning in any way that seems close to normal. That adjustment period could have a material effect on your ability to survive.
It is conceivable that the stress of your loss could cause you to lose interest in your job. This could lead to your needing to take an extended period of time away from work, or even quitting your job. If you have your own business, you could end up losing it for all of the same reasons.
Having funds from the proceeds of a life insurance policy could help to keep you afloat during a very difficult time in your life. It can give you the time you need to come to grips with your loss and to transition into what might be a very different phase of your life.
Life insurance for kids is very inexpensive
Compared to what it would cost to provide life insurance for an adult, coverage for kids can be very inexpensive. You can purchase a 15 or 20 year term life insurance policy, with a $100,000 death benefit, for just a few dollars per month.
For the amount of coverage you’ll be getting–and hopefully never needing–the cost would be relatively insignificant. You’ll almost certainly spend quite a bit more than that on a monthly visit to the movies with your family.
If you buy whole life you‘ll lock in a very low price for life
Not everything about taking a life insurance policy on your child is related to losing the child. There are certain living benefits to your children too.
Whole life insurance is permanent insurance, meaning that a policy taken now will lock in both the premium and the face value for life. The younger you are when you take a policy, the lower the premiums will be. It goes without saying that the premiums will be lowest for children.
The rate you lock in for them now will apply all of their lives. Once they reach adulthood they can take over the premium payments. Meanwhile, cash value will build in the policy giving them a sizeable asset in early adulthood.
Preparing for a disaster almost guarantees that it won‘t happen
One of the reasons people don’t like to even think about buying life insurance for kids is that there’s some vague idea that having it is like betting on losing your child. But I think that the opposite is much closer to the truth.
Life seems to work in that the disasters we are prepared for never seem to happen. It’s the disasters that we never thought of that seem to be the most likely–and the most difficult to deal with.
None of us have the ability to predict the future. To think that by buying life insurance for our kids we might somehow cause their loss, assigns some sort of mystical power to a decision we make. That’s pure superstition and nothing more.
We use insurance to prepare for all sorts of disasters in life. We have health insurance, auto insurance, homeowners/rental insurance, and even insurance policies to cover our incomes and our businesses. In no case do we ever take such policies with the assumption that doing so will cause a disaster.
The same should be true of buying life insurance for kids.
photo by RageZ