Children’s Life Insurance Debates

Children’s Life Insurance DebatesNew parents learn quickly that life insurance is very important to start when they have a baby. Most parents look at policies that will increase in value or have cash values so that they are saving for their children as well as covering them. Life insurance policies are positive steps to take when parents bring home a new baby from the hospital.

Term life insurance:

Parents can purchase a term life policy for their children starting on the day they are born. These policies are usually in $5000 dollar increments. Term life policies are set up for a limited amount of time. Each month the payment is made and the policy does not decrease as time goes by. After a term of 6 months, one year, five years all the way to 30 years, the insured has the chance to reinstate the same policy. Sometimes the rates increase when a new policy is issued. Term life insurance is one of the cheapest ways to insure a child.

Term life insurance does not increase in value or collect a cash value. A policy for children starting out is usually smaller but parents want to make sure they have coverage. Each child in a family will have a separate policy covering them. Parents can do a group policy that has individual names on the policies.

Whole life policies:

Some parents choose whole life policies so that they can build up cash value over the years of coverage. Parents want to do what is right for their children by protecting them in case of accidental death. The benefits in the policy will cover the child in case of unfortunate death and cover the parents as well.

Whole life policies are the type of policies one keeps permanently. With whole life policies, only part of the premium is paying for insurance. The rest of the payment goes into a cash value or investing. This type of policy is great to start when a newborn comes into the world. Some parents take out policies for their child when they are born and continue to carry the policy until the child reaches 21 years of age. After this, the parents usually let the young adult take over the policy or the parents continue to pay.

Some parents feel whole life insurance is a waste of money. Many parents feel that purchasing insurance when a child is young is a waste because they do not feel like they will need the insurance for a long time. Parents that purchase whole life insurance when the child is young are guaranteed that the child will have insurance when they are older. It is much harder to get insurance when someone is old. Older adults have health issues that sometimes keep them from getting life insurance at a reasonable rate so purchasing when they are babies helps guarantee coverage.

Life insurance through school system:

Some schools offer parents the opportunity to participate in a group policy that provides life insurance and health insurance to children at a reduced rate. Some financial advisors feel life insurance is a waste of money and others agree with parents that purchase insurance for their child.

Statistically Speaking:

According to consumer reports, only 15% of families with children that are under the age of 18 do not have insurance coverage. People are having difficulties paying the premiums and 22% of the parents with children that live at home say they do not have insurance because they cannot afford to pay for the insurance. The government helps children with affordable health insurance but does not help parents to purchase life insurance for children. Explains how the government covers children with health insurance and dental insurance with a small out of pocket cost but does not cover children with life insurance. The government should look at coverage for children because parents that lose a child are unable to pay for burial. The government will be responsible for the burial of a child in this case.

The average amount of coverage was around $255,000 in 2006. Since that time, policies have not decreased or increased and about 95 million adults are presently without life insurance coverage. On an average, the male in a household carries the higher amount of insurance because they are the ones who pay most of the bills. Women in families carry smaller policies averaging about half what the man carries. Children carry the least in insurance policy coverage.

Children’s Plans:

Most parents can start a plan for an infant for pennies on the dollar. Most of the policies that cover children will allow parents to purchase life insurance for their infants and increase the coverage at any time. Grandparents will also take out policies for their grand kids as a love gift.

Parents can add their newborn or children onto their own policies as a kid rider. The rider will remain on the parent’s insurance policy until the child reaches age of 18. This plan is not separate from the parents and the child will not be able to continue this same policy after age 18. This type of coverage is usually inexpensive for the parents.

Is insurance a Good Idea?

Insurance coverage is always a good idea. Some parents believe it is better to begin a savings plan for their child. Other parents feel that a life insurance policy is a good investment, especially if the parent takes out a whole life policy with cash value building. Parents that wish to pay smaller premiums find term life policies to be the best way to go. Whatever policy type the parent chooses, they will feel more secure knowing that their child is covered in case of any accidental death. No one expects anything to happen to their child but we see on the news every day that sometimes the unexpected happens to our lives and the ones we love.

Tags: life insurance, debates

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