Should I Buy Life Insurance For My Child?

This is a guest post.

While many parents will put off thinking about it, life insurance can be an invaluable investment. If one parent were to die, the family left behind may struggle financially if they had no life insurance cover.

Getting a policy like Suncorp Life Insurance Cover can offer financial protection for family members left behind. It can help to cover funeral costs, unpaid debts, and can help pay the bills until everyone gets back on their feet.

While life insurance covering parents is fairly self-explanatory, many people also ask whether it is worth buying life insurance for a child. This can be a tricky question, so let’s have a look at the pros and cons.

Pros

Insure against their Future Uninsurability

One great thing about getting a life insurance policy for your child, is that you are guaranteeing their insurability later on in life. This means that even if they develop an illness, have a hazardous occupation, take part in dangerous hobbies, or anything else that could make them uninsurable, their child life insurance policy means they can still have cover.

Lock in a Lower Rate

Premiums for healthy kids will often be much lower than for adults. Buying a children’s life insurance policy means you could be able to lock in lower rates early on.

Financial Safety Net

Some parents use a children’s life insurance policy as a way to provide a financial safety net for their kids. Some insurance providers will allow you to withdraw money from the policy or borrow against it.

Cover Funeral Costs

Funerals can often be expensive, and covering such costs can be a burden on the family. A child’s life insurance policy can help to cover funeral expenses, and loss of income should the parents need to take time off.

Cover Illnesses and Accidents

Life insurance can also help to pay for medical treatment if the insured party has an accident or becomes sick or terminally ill. This will depend on the policy and on the insurer.

Cons

Expensive Payments

For many people, raising kids can be expensive. Paying for food, school, health insurance, clothes, books, toys and the rest, can mean there’s not much money left over. While life insurance is important, families shouldn’t go broke trying to pay the monthly premiums.

Other Ways of Putting Money Aside

Some financial experts argue that there are better ways of putting money aside. Having an emergency fund or a high interest savings account can also be a way of providing for your children.

Children are not Income Providers

One of the main benefits of life insurance is covering lost income should the insured party die. This is one of the reasons some argue against the idea of children needing life insurance – they don’t earn any income.

However, there are many options when it comes to life insurance. You could get a life insurance policy for your child, or you could get a policy that has a Child Protection rider (an add-on that would cover your kids), or you could get group life insurance that covers your immediate family.

Life insurance can be tailored to suit your needs and your budget. It’s not one-size-fits all! Speak to an expert to find the best option for your family, or find out more at Suncorp’s website.