Life Insurance For Children – A Terrible Idea?

Life Insurance for children looks like a terrible idea. Life Insurance for a child? Children do not earn an income and isn’t insurance meant to cover a financial loss?

Insurance is meant to cover a financial loss. So it is critically important that parents buy a life policy on themselves to protect their family. After the parents buy a policy on themselves I think there is reason to consider a Child Life policy.

So why would anyone buy life insurance for children? There are a few good reasons. And I will start with the financial reasons.

I would argue that the death of a child could cause financially difficulty. Can you imagine your child dying? It is a terrible thought and it brings tears to my eyes. The death of a child could be paralyzing and you would need time off. Most employers would certainly give a week or two of paid leave. But how long can that generosity last? What if you are not ready to go back to work for months – or years? Would your employer be that generous? For this reason alone I think a small policy on a child is not a bad idea to consider. The money would allow you to take time off work and heal.

A second financial reason is your other children (assuming you have others … if not skip ahead to the next paragraph). Would they need you more if they lost a sibling? Probably. Yet another reason you would take time off work. Beyond that, what if your children need counseling? That’s not free.

The most obvious financial reason to buy insurance on your kids is the cost of a funeral. The last thing you want to worry about is bills for a funeral if a child dies.

You might be thinking that none of the above applies to you. That’s fine. Before you go I would ask you to consider another reason When your child grows into adulthood and is looking for insurance coverage there is a chance that it will not be available due to their, health, lifestyle, or occupation. A good children’s life insurance policy will have a guaranteed insurability built in that allows them to buy more coverage without any questions about health, lifestyle or occupation.

If you are considering buying a policy for your child – please remember to review your own coverage first. There are plenty of good policies available in Canada for children. Make sure you look for the guaranteed insurability I mentioned above.