Simply stated, no life insurance for your children is needed. While we understand your apprehension at such an idea being mentioned to them, every parent knows their heart sinks with fear when faced with the idea that something might happen to their offspring.
Life insurance salespeople use emotions as leverage when persuading customers to purchase coverage for their children, but everything rests on a foundation of myths! Let’s investigate and dispel some of them before discussing what you should do instead.
What Does Life Insurance Mean for Kids?
Children’s life insurance is an insurance product designed to compensate your loved ones should your child pass away, usually as part of the payout agreement with parents. Life insurance serves only one purpose – to restore lost income of the dead.
Reasons Why Parents Should Purchase Life Insurance Cover for Their Children
Advertisers excel at tugging at our heartstrings, as evidenced by how effective advertisers are at selling life insurance for children as superior to home grocery delivery services. Unfortunately, some myths prevent people from purchasing life insurance policies for their kids:
1: I can save money for my child’s education thanks to it
No doubt you have noticed the popular feature of whole life insurance for kids – monthly premiums meant to save for college – however these are actually paying out rather quickly, and can quickly add up! But wait! Hold on – just what are they really providing you with?
Fees will quickly eat into your return, while returns tend to be similar to what one would find with traditional bank CDs (certificates of deposit). When it comes time to pay tuition fees, fees must also be paid in order to access funds – an obviously foolish move in reality!
2: It ensures that my child can later obtain greater life insurance
Some parents and grandparents wish to ensure that their children can obtain high-quality life insurance even if they develop medical issues early in life.
As most adults in their 20s and 30s can easily obtain an affordable term life policy, there’s no real need for purchasing child’s life insurance policies.
Assume you purchased life insurance for your children and they later wanted to continue it into adulthood; then both you and your partner might be surprised to learn there is a limit on the amount you can add onto their policy, which could end up not providing them enough cover over the long-term.
3: It pays for funeral bills and other expenses
No doubt life insurance would provide coverage for funeral costs; however, the chances of actually needing it are so remote that it would be wiser to place monthly premium payments into a savings account instead. That way you have control of that money in case something unexpected comes up–such as when your child needs their tonsils removed – which has an increased probability!
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