Overcast   33.0F  |  Forecast »
Edit Module

Life Insurance for Kids?

It's not a pleasant thought, but experts say parents should seriously consider it

When any parent sits down with their insurance provider, they want to ensure their policy provides for their kids – should anything happen to them. But what about getting life insurance in the event of a child's death?

Many parents consider the thought too macabre, but financial experts say that it's something they ought to weigh out. Even if they don't want to.

Considering it

"Nobody plans for something to happen to their child," says Karen Powell, an engineering specialist and mother of two from Southfield.

For Powell, the option of obtaining life insurance came up because the benefit was offered at work. Before settling on a decision, she consulted a financial planner, who helped her decide that it was a financially-sound thing to have if something tragic happened to her children.

"In utter respect, death is going to be the biggest reason," says Keith Smith, licensed insurance agent for Heritage, a health and life insurance company located in Sterling Heights.

Reasons

The main reason for life insurance is to get some money in the event of the policyholder's death, to cover funeral expenses and/or loss wages for the person who died. In the case of kids, unless the child is a superstar making a substantial amount of money, the insurance plan is more of a crutch for unexpected deaths.

Smith says most families don't prepare for such tragedies, which can leave them covering some fairly steep funeral costs, ranging from $10,000 to $15,000 – in addition to the cost of a burial plot at a cemetery.

Life insurance policies also can be a financial security blanket for when your kids reach adulthood. Purchasing an insurance policy on your child can get them an inexpensive foothold into a life insurance policy as part of their adult financial portfolio.

How to

Policies on children, who have low death rates, are typically inexpensive. "The best way to purchase life insurance is to add the child as a rider to an existing life insurance," Smith says.

Adding a child to a life insurance policy that already exists, such as the one you have for yourself, is considered a "rider" because the second policy is tacked on to the initial policy. When adding your child as a rider, the payments for your child can be as low as $4 a month. A separate policy for your child can cost around $25 or more a month.

Deciding

Smith says parents should talk to an insurance agent to see if getting a life insurance policy on their children is a good fit for them. Beware of mailings that could be scams trying to scare you.

"Talk to somebody and tell them about your situation," Smith says. "Just talk to a real person instead of responding to something in the mail."

Be sure to discuss your family size, income and age of your children, and express concerns you may have about getting a policy.

Jun 6, 2013 12:42 pm
 Posted by  Marc

Many experts actually would disagree with your suggestion to buy life insurance for your kids. I recently answered a similar question on Quora that provides a different perspective: http://qr.ae/pog6p.

- Marc Wiznia, chief operating officer of Wizbe.com, the financial guide for parents.

Add your comment:
Edit Module
Edit Module
Advertisement
Edit Module

More »Latest Articles & Blog Posts

Craft Review: Epson's LabelWorks Printable Ribbon Kit

Craft Review: Epson's LabelWorks Printable Ribbon Kit

This cool family crafting tool isn't just great for creating ordinary labels. It's also a handy holiday tool for gift wrapping and other creative DIY projects.

Make Cute Penguins with Candy Aisle Crafts Book

Make Cute Penguins with Candy Aisle Crafts Book

This delicious title features super creative, clever and easy crafts that southeast Michigan families can make with a simple trip to the grocery store.

Michigan Mitten Free Printable Greeting Card Craft

Michigan Mitten Free Printable Greeting Card Craft

Want to make the season bright, with a distinct dash of hometown flair? Our template is the perfect starting point for an easy, impressive card kids can make.

Meet Angelina, Metro Parent December 2014 CoverKid – VIDEO

Meet Angelina, Metro Parent December 2014 CoverKid – VIDEO

All bundled up and ready for winter, this 6-year-old Canton kid is ready to lead southeast Michigan to some fun events – and make you laugh out loud!

Elsa's Icy Braid: How to Create a Disney Princess Hairdo

Elsa's Icy Braid: How to Create a Disney Princess Hairdo

The super cool character has a signature hair look. Recreate it with this guide from the book Disney Frozen Hairstyles: Inspired by Anna and Elsa.

Tips on Teaching Kids The Joy of Giving Presents

Tips on Teaching Kids The Joy of Giving Presents

How to help kids learn the value of giving presents this holiday season – not just receiving them.

College Blues: Signs and Solutions

College Blues: Signs and Solutions

Things change once teens graduate from high school and sometimes those changes can really impact their mental state. Here's how to identify and help with kids' at-school problems when they're home...

Edit Module
Advertisement
Edit Module
Advertisement
Edit Module
Advertisement