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The Wonder Years 1988-1993 | Should parents buy life insurance policies for their young children? |
What do you think? Give good reasoning for your argument...THANKS!!! |
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mbrcatz
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I think it's a waste of money. Maybe 5% of parents keep the policies more than 10 years. Most of the kids don't convert them when they turn 18.
And if you run the numbers, financially, you're MUCH better off just sticking the insurance payment into a mutual fund. You'll have a college education for WHICHEVER kid needs it. God forbid you lose a child, your ONE account can pay for whichever funeral you need. |
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deep5223
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I don't think #2 read your question. There are many thoughts on this subject and the only one that counts is yours. As the first answer states, MOST people can do better by investing the money they would spend on insurance. The problem is, you never know how long you may have before you have to bury one of your children. Not something we like to think about, but it does happen. I generally recommend a small child term rider on a parent's policy. It is cheap and if you should need it, it is there. I have seen too many people begging for money to bury their children because they had no insurance. Peace of mind is worth a lot to me. |
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nrving
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Most of us at some point in our lives will have a need for life insurance, I doubt that anyone here would dispute that. Unfortunately, most of us fail to realize this until we are in our mid 20's to mid 30's or when we are diagnosed with a serious illness.
I suggest to all of my clients that they purchase a small VUL (Variable Universal Life) for their kids. It's not meant as a way to save for college or to provide money for their final expenses, rather it is there in case they are unable to buy life insurance later on. There is no better time to buy life insurance than when you are young and healthy, its less expensive, less underwriting requirements (most of the time there no medical exams required for "Juvenal" life policies), and if health conditions change (diabetes, asthma, hepatitis, etc..) life insurance is already in place.
In my opinion, it is beyond debate, its simply the right and responsible thing to do for your children. |
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ptstrobl
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It's not a bad idea, a small amount for funeral costs, god forbid. Another option is to take out a Variable Universal Life policy on them, as the cost of insurance would be really low, and the investments inside to product could be used for college money down the road tax free. It's more flexible than a 529, because what if the child opts not to go to college? They could use the funds for a house, or to start a business...or just leave it in there and let it grow. Looking way ahead, these funds are also protected in a divorce or if one is ever sued.
I wouldn't take out a huge amount, but something between 100k and 250K death benefit would allow some room to put some investment money inside it.
This strategy can make sense sometimes--depends on your situation. |
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Barry auh2o
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Yes, you should.
Buy a small policy, Gerber Life and others have what is called a "jumping Juvenile" policy.
They offer a small amt of ins then at 21 they jump in value, AND the premium does not change! And the coverage isavailable almost right after the baby is born. As much as you'd rather notthink about it, babies and chilren do ie, and you will need funs for the burial.
Also, suppose the child develops a health condition which jeopardes the the chance of being able to buy life ins? This way, you're covered.
Google "Gerber Life"or talk to your agent. |
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duretteg
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I've always told my clients that when buying a policy on a child you are " insuring against future illesses". What I mean by that is if they buy it young, when they're healthy, noone can take it away. Even if they suffer later from an uninsurable disease/illness there's nothing the company can do.
But, if nothing ever happens to the child did you waste your money? |
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blb
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Yes it is the responsible thing to do as a parent. Buy the life insurance while the child is healthy. It is something they will have for the rest of their life with very low premiums. My niece didn't buy life insurance for her daughter and she had leukemia when she was 2. It is now back again. She will never be able to get life insurance without paying a fortune for it after she has been cancer free for a minimum of 5 years.
See your local agent about purchasing life insurance for your kids. |
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Greg R
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The parents should be 100% protected before policies are bought on the kids lives. If a kid dies yes his parents might have to borrow to pay for the funeral, but if a parent dies who normally makes $80,000 a year and is only 30 years old now they have lost the earning of $1.6 million dollars over 20 years. Now the children have not only lost their mom and dad now that lose their other parent b/c they have to work full time or maybe even more to pay the bills. After they are covered children's policy's are great. |
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hillbilliemoonshine
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I think there is some good points with answers 1 and 3, #2 I don't think was keeping your question in mind, it sounds more like his sales pitch he's used to giving. I strongly advise AGAINST using a life insurance policy as an investment vehicle, and alot of agents will say the same thing, most agents that sell them do so because that's the first kind of policy they were taught to sell, they may also be focused on profits. I disagree that it's a waste of money, you should purchase a TERM policy, we're talking a couple dollars a month for a child. Alot of people don't take into consideration, that when you lose a child, you may not be able to focus the same way on your work, a year later your mind is still clouded by the devastating loss. So, whereas $10k-$20k would help cover funeral costs and and a few other things, consider YOUR financial well being for the next year, go for a $100k policy. Seriously, a $20k policy should be between $5 and $10 a month for a child around 2-5 years old, possibly a little less. That is not cheap coverage, that is an honest number from a strong company. If it starts getting to be more than that, you need to figure out why.
ON TOP of that, Mutual funds are an excellent way to go if you plan on saving for college or even cancelling out the need for life insurance LATER, the child would not be covered until then if you went with just a mutual fund, which could take years if you're making minor contributions here and there. But honestly, do both, term life coupled with a moderate mutual fund will cost less money than purchasing a Universal Life policy (which I believe the Gerber plans are), plus, you will most likely get a better return on your investment with a mutual fund.
I don't mean to write such a long response, but this is something I feel strongly about, I even made an account just to answer your question. To shorten it up: Yes, parents should purchase a policy for their children but they should ALSO consider mutual funds as an investment to eliminate the need for life insurance later in life. It's about the family's well being, not just funeral expenses. I hope this helps. |
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wcqa626
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Just add the child as a rider on to your life insurance. A child doesn't need their own policy, because if they were to pass, it wouldn't affect the income of the family in a negative eay. |
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