Is this worth the investment?
The question of whether children need life insurance coverage is a divisive topic. While there are both proponents and opponents of such policies, there is a general consensus that these types of policies should not be a financial property. For instance, most financial advisors prioritize having an emergency fund and saving for your child’s education over getting a life insurance policy for your kids. If you have some extra capital, here are some of the things you should consider before choosing to invest it in life insurance for your kids.
It Pays for Funeral Costs
If your child were to die unexpectedly, this tragedy would leave your life in shambles. The last thing you would want to think about is how you are going to pay for his or her burial and funeral. If your child had a life insurance policy, their death benefit would likely take care of this cost.
That being said, the odds of a child dying are very slim. With modern medicine and parental education resources readily available, children are healthier and hardier than ever. A better use of your money would be to stash it into an emergency fund. This way you could access this extra capital to help you pay for emergency medical expenses or other types of crises.
It Helps Them Qualify for Life Insurance Later in Life
If your child develops a medical condition when they are young, this can make it difficult for them to secure life insurance later on. By securing life insurance now, you can ensure that your child at least has some coverage and that they have an increased chance of securing additional coverages.
Even with this sentiment in mind, the vast majority of twenty and thirty-somethings do not have any trouble securing life insurance. Additionally, if you already have a life insurance policy from when you were a child, this actually limits the amount of coverage you are able to purchase later on. Generally, your coverage amounts are limited to a multiple of your original policy amount. Oftentimes, this total is too small to provide the comprehensive life insurance that you need.
These are some of the things you need to consider before deciding to purchase life insurance coverage for your child. Do you have additional questions regarding your life insurance protections? Don’t hesitate to contact the experts at John Scott Insurance. We are ready to assist you with all your personal coverage needs today.