Some people are superstitious about insurance. They’re afraid to buy
life insurance for their children, just as some older people are afraid to buy
it for themselves.
Others are convinced that nothing bad could ever happen to their children,
so they avoid spending the money to insure a child’s life.
Realists, however, know that there are reasons beyond the unthinkable to insure
a child’s life. They know that a good life insurance policy, purchased
when the child is young, healthy and far from any negative events, can pay big
dividends for the child later. (And, as little as we like to think about
it, if something awful happens, how much more awful would it be to have financial
stress added to disaster? Peace of mind can make life as a parent much
In fact, most of the ample reasons to insure your child’s life are really about
ensuring that your child can have a long, happy, prosperous life, regardless
of what he or she encounters in terms of illness or accident later.
Here are a few of those reasons:
Permanent life insurance accumulates cash value, and that value is generally
tax-deferred. When the child is ready for college, the cash could help
pay for it. Or, it could help the child purchase a first home. If
the policy was left untouched through those life transitions, it could even
help fund your child’s own retirement!
Buying whole life or universal life insurance now guarantees your children
will not be without insurance later, when they are more likely to need it.
Later in life, if they should develop an illness or sustain serous injury, it
could be prohibitively expensive, or even impossible, to obtain coverage.
Insuring a child’s life with whole life or universal life also means that
the child’s coverage can continue regardless of military service, health conditions—or
taking a college major in skydiving!
When you shop for insurance for a child, there’s still more you can do. You
can make sure the plan you buy offers a rider to purchase additional insurance.
With that option, at such specified times as marriage or the births of your
own child’s children, your child may buy additional insurance at standard
rates, without reapplying.
An additional insurance rider might be even more valuable as science makes
advances in genetic testing. As medicine is able to identify genetic
‘time bombs’ at ever-earlier ages, this rider offers some protection against
becoming uninsurable because of such findings. Such a rider generally
offers the opportunity to increase coverage on a no-questions-asked basis.
Advances in the science of statistics, too, will more firmly establish the
mortality rates of various physical conditions, hobbies and professions.
Your child becoming a member of any of those identified groups would also
result in a premium hike, or the inability to purchase insurance at all.
When you buy life insurance for your child, your main intent—especially if
you are a young parent with limited resources—may be to cover expenses you’d
incur if you did lose a child to illness or accident. And that may be
enough. But it’s also nice to know that there’s so much more that coverage
can do to help your child start—and continue—the good life you provided.