There are many different types of insurance needs. It can be a challenge choosing those which one considers necessary. There are at least three major types of insurance needs. These are vehicle insurance, property insurance and life insurance. Now added to this list of important insurance is life insurance for kids. But, is it really necessary? If so, then why?

Should I Buy Life Insurance for My Child

Many parents don’t want to consider the thought of life insurance for their children. It is a distasteful thought. In that, it reminds parents that something could happen to their child. That would cost them their life. Parents think of life insurance for children as a way of benefiting from their demise. This may be the wrong way of thinking about life insurance for the little ones.

Insurance Coverage Protection

It has become common knowledge that many insurance companies will not provide life insurance. When there are pre-existing health conditions. Although this is not quite as strict as it used to be. When one goes to take out a life insurance policy they normally have to fill out a questionnaire. Part of it will pertain to any health problems they may have. As they pertain to a condition. If there are some, it doesn’t mean the applicant will be denied. It will depend on many variables. Most likely it will mean an increase in premiums. Or some sections of coverage are excluded. It means the policy coverage may be modified.

Once an individual has an insurance policy, it cannot be cancelled. Not because they have developed an illness. This is not a pre-existing condition. This is where it becomes important for life insurance for kids. Once they have an insurance policy, they can carry it forward into their adulthood. Depending on the type of life insurance policy that has been purchased.

Some youngsters develop a medical condition in the future. They already have their insurance coverage in place. This is one of the major reasons why parents are now considering life insurance policies. For their kids.

The Argument against this Reasoning

There are some that say this approach to children’s life insurance is a waste of money. Assuming the policy does not have to be paid out. They may say that this is a gamble. But, buying any insurance is a gamble. It is in place in the case of “what if.” Life insurance is there for those that could lose their life, which is anyone.

Considering Genetics

Genetics

Nobody can predict what their health is going to be like in the future. Prevention is becoming a big factor now in the health care of many individuals. They are looking back into their genetics to determine what their risks may be for the future. This may be of some value. At least when determining whether life insurance for children is a plausible investment. Again it fits into the train of thought of getting insurance while one is healthy. So they are covered when they get older.

Medical Costs

In many parts of Canada, health insurance is mostly free. But over the years this has been changing. Now people are paying more for medical costs than they did in the past. There are many illnesses that can create additional and substantial costs. When it is a child that has become ill parents want to do everything in their power for them. To get them the best medical attention.

This may come at a cost that they just cannot afford. It may mean that they need to borrow money or take out a mortgage on their home. If loss of life occurs then at least the proceeds from the child life insurance policy can help. To at least offset these costs. It is not a pleasant thought. But quite often there are other children in the family that have to be considered as well. Their future has to be considered. If the family has a heavy financial burden, this can have a dramatic effect on them.

Best Child Life Insurance Plans

There are some valid reasons for buying life insurance for children. Another thought is how it can benefit their financial future. With this thought in mind, it means looking at the type of insurance plan that is going to allow for this.

Whole Life Insurance

Whole life insurance pays out dividends. These can be used for the children in the future to help them pay for their education. Or, they are funds that could be used for other investments. For some, it gives them the opportunity to put a down payment on a house.

More insurance companies are now looking at child insurance plans. These take careful thought. The cost of paying into the insurance has to be compared against the value of the policy. The cost of premiums is going to vary based on a particular policy. For example, the cost of a premium could be as high as $216. A month. But that could give cash value of about $75,500. At the age of twenty-one. This would go a long way as an education fund.

Child Plan Canada for Life Insurance

This is just one example of the different plans. Those that are now becoming available for parents to consider.

Comparison Shopping for Life Insurance for Kids

kids

No matter what kind of insurance one is going to buy, they need to do so in an informed way. They can only do this by insurance comparison shopping. It can begin by getting some quotes then doing some comparisons. The comparison should not be done just based on the cost of the premiums. Comparisons should be done on what one is getting for what they are paying for.

One mistake that many people make does not realize insurance is an individualized product. Every person being insured is different. That includes children. The entire terms of the policy have to be carefully studied. Maybe even more so when it comes to insurance coverage for children. It is because the reasons for buying the insurance may be different. One has to be sure the insurance they are investing in is going to meet the intended purpose.

Resources

https://www.theglobeandmail.com/globe-investor/personal-finance/does-your-child-need-life-insurance/article618397/
http://www.moneysense.ca/save/financial-planning/should-you-insure-your-child/
https://www.insuranceforchildren.ca/education/
https://www.gerberlife.ca/gl/view/cd/index.jsp