What is the Purpose of Life Insurance Policies for Children?
What is the Purpose of Life Insurance Policies for Children?
I thought life insurance policies were for the remaining family members after a person's death. For instance, the main worker in the family should get a life insurance policy to ensure their spouse and children have enough money if somethign were to happen.
Now since children do not contribuite to a household income. Why would there be life insurance? I just saw a commercial for one, and it got me wondering. I am only 16, so no rude comments if I have the point of life insurance all wrong here.
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10 Responses
1.31.2010
Best Answer – Chosen by Voters I gladly pay around $10/month per child so that if something should happen, I don't need to use a VISA card for a funeral and open a bill every month to remind me of my loss. I also like that I can take time off from work to grieve. Most importantly, my children can add to their life insurance at several times in their adult life without having to answer a single health question.
1.31.2010
The other answer to your question is correct – after death there are serious expenses that can be covered by life insurance for children.However, there is another reason: Insurable. It is wise to purchase life insurance as young as you can be. As you grow up, you might have a decrease in your medical status, which may lead to you being rejected for insurance, or be required to pay more or even be excluded for preexisting medical condition. Buying your child life insurance buy him/her also the opportunity to continue it as adult at favorable rates. Source(s): http://www.sinclairpremium.comwww.iace.comhttp://www.sinclairpremium.com/article-l…
1.31.2010
You are correct. Life insurance for children should be in small amounts, just enough to pay for a funeral.However, the better way to go, in my opinion, is for the parent to get life insurance and then add a "children's rider" to their policy. It is a lot cheaper. But lots of insurance agents do things to make more money in their own pocket, more commissions. Source(s): I am one honest life insurance agent.
1.31.2010
Nominally, it's to pay for the funeral for a child. Many, many families don't have the money to cough up, for a funeral, if the child dies. But it's SOLD to parents, as "guaranteeing their insurability". That means, you pay through the nose from the time they're a child, so that IF something goes wrong as an adult – or they get fat (obesity and type 2 diabetes from obesity are the fastest growing health problems with American children), they have insurance as an adult.
1.31.2010
Life insurance is not meant to cover lost income of the one who died. It's meant to help pay off funeral costs and the cost of living while grieving. If someone to lose their child and had life insurance on them, then hopefully they would have the financial ability to take off time from work and grieve over their loss.
1.31.2010
You have one of the points of life insurance down, but step one for determining the amount of coverage for anyone is for burial and final expenses. That expense affects everyone and some families don't have an extra $10,000 (for example) laying around should they lose a child. And those that really don't have it really appreciate having the coverage.
1.31.2010
first,you should collect some resource by searching the relevant keyword in search engine,if you got good luck there ,then your problem solved.however,if you are not able to find the ideal answer by doing that,here http://www.insuranceidea.info/free-insurance.htm is the resource i recommend.
1.31.2010
Life insurance, is to help the family pay for very expensive funerals too. Every year the cost of everything goes up, funerals are not cheap.
1.31.2010
"JD" is wrong. Life insurance IS primary intended to protect survivors who depended on your lost income. Life insurance for children is a optional choice that some parents make.
1.31.2010
I just had my first child 9 weeks ago. I bought insurance for a few reasons.First, if he were to die, I would need money to pay for the funeral cost plus I would need money to float my wife and I during what I would assume would be a long period of grieving. I can't imagine that I would be back to work any earlier than 2-3 months. I just know how my wife and I are and we would be devastated and consumed with grief. We're a young family and don't have significant savings to cover all of our bills over that period of time plus funeral expenses.Second, it does guarantee insurability, and the ability to increase the death benefit as my son ages. Right now, I have $50k in coverage, but I can add $50k at 11 points throughout his lifetime without having to pass underwriting (passing medical questions). This means that even if he does get some sort of illness or is in poor health, I can guarantee that he'll have $600k in live insurance if he lives until his 60's. This is more beneficial that some people try to claim it is. I have some clients in the mid-20's who are already medically ineligible for life insurance for various reasons. I've seen how frustrating that can be and don't want my son to go through that.Third, I'm slightly overfunding the policy (paying extra) and plan to increase this amount significantly over time. Right now about 90% of the money I'm paying for the policy is being saved as cash value and is currently earning 5% interest (with a guaranteed minimum interest rate of 4%). This will make a great supplement to my education savings for him, or I could use it as a gift some day. If he gets married at the same age I did (25) and has life insurance of his own, I could cash out this policy and give him $15,000 – $20,000 as a wedding present without eating into my own savings. I like that prospect.To be honest, my first reason is the only thing that concerned me when I decided to buy the policy, the second two reasons are just additional perks.I wouldn't sell my clients a product I didn't believe in or wouldn't use myself. For some people, insuring their child is a good idea, for other's it isn't. To each his own, but there are valid reasons for doing it other than "so the agent can make money." Some "life insurance agents" on Y!A have a severe disdain for life insurance…I don't even know why they sell it. Source(s): Agent/father.