Should I Buy Life Insurance for my Kids

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The simple answer here is yes. The worst fear of most any parent I believe, is something bad happening to one of our kids. I can’t think of anything that would be worse than burying a child. But senseless tragedies happen. What effect would losing one of our kids have on us? First, there is the emotional devastation. How soon could we go back to work? Would you want or need to take some extended time off during the grieving process? Second, there is the immediate financial impact of a funeral, possible medical costs, family travel and loss of time at work.

When I suggest to a client or prospect, “do you think it would make sense to have some life insurance for your kids?” I will either hear, “oh no, that’s morbid,” or “yes I guess that makes sense.” But for the former response, we need to take a step back and take a non-emotional view of the question – why having life insurance on our kids is vital.

I think we’ve all seen news stories of a family who unexpectedly lost a child and there are pleas from the community and maybe local church to raise money for the parents to help pay for a proper burial. The financial stress only adds an unnecessary extra burden to the grief of burying a son or daughter.

All of us that cannot self-fund a funeral and loss of time at work should carry some coverage on our kids. The good news here is that the cost is quite low. On average, you can purchase a rider on your policy to cover all of your kids for around $5 per month total. This would provide a tax-free, immediate cash payment of $10,000 if tragedy strikes. Higher or lower face amounts are available. The coverage stays in effect until each child turns 25, or as long as you keep your policy active.

You can also purchase individual policies on each child that build a cash value. This type of coverage can later be transferred over to your child when they are older.

What type of policy you purchase is not important as long as you get something in force. I get many calls from grandparents wanting to purchase life insurance coverage on their new grandchildren. My take on this is that as we get older and experience many of the unexpected twists and turns of life, we learn to plan ahead. Wisdom truly does come with age.

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