Do Kids Need Life Insurance?

Discussion in Life & Health Insurance started by pafjlh • Feb 4, 2015.

  1. pafjlh

    pafjlhActive Member

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    This is a question I have to ask, why because I see so many car washes out there these days trying to raise money for the funeral of kid. Its a sad situation that some of us think of life insurance as something for adults to have. Yet, the truth be told whether we like it or not kids need life insurance as well. I remember growing up when schools offered life insurance for the kids going there, my parents always made sure they had the money to insure us.

    But I find that this isnt' just an issue with kids. There are even adults who think it isn't necessary to insure themselves at a young age. But the thing is death can strike at any age. I see a commercials on TV these days that kind of annoys me about a daughter getting concerned because her mother got life insurance and the daughter herself is married iwth kids. I so wanted this mother in the commercial to tell her daughter that she too needed protection because she need to provide for her family, none of us know when our time comes. But no the commercial was all about the mother getting insurance and not encouraging the daughter to do so. Again bringing home the message that life insurance is something older people should get.

    Anyway, these are just rants of mine. Throughout my life I have known the importance of life insurance at any age.
     
  2. Sunshine

    SunshineActive Member

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    I think the purpose of life insurance is a safety net in case a provider dies early, leaving a family upside down and with no way to continue to bring in the same amount of money.

    I think insurance companies can raise fears and unfounded thoughts about the need for life insurance on kids, childless people, and unmarried folk. In those instances, you are really just paying monthly premiums in the rare un-probable event of early death, and then just giving a jackpot payout to someone who had no financial dependance on you in the first place. So it is nice if you want to gamble your money every month in order to give someone a great present should you die, but really, I don't think it's necessary for you to do, and it's a lot of money down the drain.

    If you are married though, someone is depending on you, so you should get insurance. If you have kids, they are depending on you, so you need insurance. Basically, if you are financially supporting someone you should have insurance, but if you are not, I view it as a waste of money. You'd be better off just putting payment money aside in a saving account, where you're guaranteed to get it back.
     
  3. steph7h

    steph7hActive Member

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    The only kind of life insurance I would recommend for children is cheap term life insurance. Yes, children are unlikely to pass away and actually need anything, but for parents who face the situation of losing a child and then having to cover funeral expenses, it can be overwhelming. Now, if you can afford to go out and pay for the entire funeral from savings, then yes, life insurance for kids is probably a waste of money. But if you would be hurting financially trying to cover funeral expenses for a child, then it's a good idea. My husband can get term life insurance on all of our children for 28 cents a week through his employer, and that provides a $10,000 benefit per child if they should pass away. To me, that is cheap enough that it is worth the peace of mind it provides us.

    As far as singles/people without kids, it's still important for them to at least consider some cheap term life insurance, unless they have their funeral expenses saved up in a savings account or pre-paid even. Many people think that since they're young they don't need it, but if they pass away unexpectedly in a car accident, it could cause quite a financial burden on their family trying to cover their funeral expenses, and I think that is inconsiderate planning on the single person's part. Yes, no one expects to need it at a young age, but if you can't pay for it out of pocket, why put that burden on someone else after you pass away.
     
  4. Winnie

    WinnieActive Member

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    Yes, I think everybody needs insurance no matter what the age, that is unless one is independently wealthy and can afford funeral and burial costs on their own with no help at all. Getting certain types of insurance is a touchy subject that some people would rather ignore than deal with.
     
  5. SweetMamaKaty

    SweetMamaKatyActive Member

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    I agree that in most cases everyone should be insured. Some people may naturally be good savers, but I would imagine many are not. In the type of situation where there is a bank account full of money to pay the funeral expenses, the insurance would be a waste I guess. For my family though, that's not the case, so we have insurance for everyone, children included. Nothing would be more devastating than to lose a loved one, and then also be in major financial trouble during a time of grief.

    I do think the commercials OP is referencing are geared toward older adults, because statistically they have a higher "chance" of passing away. I imagine life insurance for young people is a very hard sell unless someone is seeking it out on their own.
     
  6. pafjlh

    pafjlhActive Member

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    Oh I agree that kids don't need an expensive policy, something that is cheap such as the one from Gerber is good enough. It would at least cover the cost of a funeral. I think that the older someone gets and the more responsibilities they have such as having a family the policy needs to be larger to make sure the family will be somewhat provided for in case something happend. I think back to 9/11 and the amount of young people who lost their lives that day. Many of them didn't have life insurance but get this were married even with a family. I just couldn't understand why this was the case. I know that life insurance can be a scary thing to contemplate but it does give us piece of mind. As for large premiums it depends highly on the policy. I have a policy that cost me fifteen dollars a month and covered for around fifty thousand, which is enough for a single woman of my age.
     
  7. Pat

    PatWell-Known Member

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    A good reason to get a life insurance policy on a child is not to have money to pay for their funeral but to cover them when you know they are healthy. As they get older and develop an illness that will not allow them to get life insurance at a reasonable price or is not available due to the illness. They have coverage that was purchased for them when they were healthy, it may not be much but it will be something. When you see those ads get your child a policy that is reasoning behind the get it now thought also the policy is grow cash, the longer you have the policy the more cash you will have.
     
  8. blueeyes

    blueeyesActive Member

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    I do agree that everyone including children should have some type of life insurance. My brother was killed in a car accident when he was in his teens and did not have any life insurance. My mother and I had to pay for his burial etc , out of pocket. At a time when you are in shock over a death, you shouldn't have to make decisions about spending money but that's what happens when there is no insurance.
     
  9. James-M

    James-MMember

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    If your goal is save money for college, a 529 plan is the way to go, unless you don't want to invest in mutual funds.
    There are other reasons to buy life insurance for a child. The most important is if you have a feeling that their insurability will be a question in the future. Underwriting is usually very simple, and you can usually add future purchase options as well. This will protect their families in the future, it's not really about insuring them as children.
    Whole life can be an attractive, conservative investment over a long period, but in my opinion it is not a first choice for college savings. There are also other types of cash value insurance apart from whole life you might consider.
     
  10. AlexZ

    AlexZMember

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    Life insurance is a terrible investment. Whole life insurance is a terrible investment. Universal life is a terrible investment.

    Just google 'Dave Ramsey life insurance' or 'Suze Orman life insurance' and you'll find they'll concur. Heck, even look at Finance for Dummies, How life insurance polices rob you, etc. for more proof.

    Life insurance is only intended to protect against the adverse financial impact of losing a loved one. You'll find better investments elsewhere.
     
  11. Nakitakona

    NakitakonaActive Member

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    I think it is impractical. Life insurance for the adults for the purpose of leaving something for his surviving spouse or family. The appropriate insurance for the kids is accident insurance. In school, all our students have a group accident insurance. It is very cheap and it is renewal every school year. Unlike the life insurance, there is a monthly premium to shoulder by the insured.
     
  12. Happyflowerlady

    HappyflowerladyWell-Known Member

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    As a former life insurance agent, I totally agree with the above poster. When children are young and healthy is the best time to get them a small life insurance policy. They basically only need a small policy that will cover any final expenses, should something happen to them . We see all of the time in the news where a bus load of school children were on a field trip of some kind and there was an accident and students died. Nowadays, we even have school shootings, so there is a lot more danger for young people than there used to be. Even when the fatality is something which would be covered by the school, or other coverage, those things usually are part of a long drawn-out court settlement, and the life insurance policy will pay out in the same week when the family needs it most.
    Getting a whole life policy will also grow cash value that can bee borrowed from later in life if the person needs money and can't qualify for a loan. Plus, the premiums are locked in to the same amount for their whole life, so they never go up, and the person always pays the same amount as it cost when they were a child and the parents bought the policy.
     
  13. Belovedad

    BelovedadActive Member

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    I don't think so as there are not a lot of benefits as opposed to a full grown adult who is more likely to experience death. The only thing I can see life insurance covering for a child is the funeral unless they've inherited something before death. Not worth it and not practical.
     
  14. Alexandoy

    AlexandoyWell-Known Member

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    The target of life insurance is mostly adults who have the capacity to earn money. The concept of the insurance is to provide something to the family when something happens to the subject (who has a job and probably a good job). But with children, it is okay to get life insurance for them if you have extra money since it is a good investment. After some years (20 or 25 years) the life insurance becomes mature and the child, if still alive, can get the proceeds of the insurance - all the premium you had paid plus the interest earned.
     
  15. Jason76

    Jason76Active Member

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    In the past, kids often died younger. However, as we all know, with the advancement of modern medicine and improved nutrtion, the mortality rate is tremendously lower. Therefore, I guess we can say, "If life insurance is offered to kids, then the premiums are incredibly low.". :)
     
  16. remnant

    remnantActive Member

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    Each stage of life has its own unique dangers necessitating a life insurance policy. It would even get better with kids due to the fact that the life insurance policy is likely to mature earlier conferring them the benefit of the sum assured which would contribute towards their financial security. In my humble opinion, the earlier the better.
     
  17. Jamille

    JamilleActive Member

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    If such unexpected event happens, an emergency fund should be able to cover the expenses. But if you have extra funds that you can't use elsewhere to invest, a life insurance policy for your child with a trusted provider might be a good option. Personally, I'd rather increase the premium on my life insurance so my son can have more in case something happens to me. Another option is to invest the money in government or housing bonds or in premium savings account with significantly higher interest rates than regular savings account. These investments are secure and are within easy reach.
     
  18. Zero

    ZeroActive Member

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    I just don't need the need for it especially in this day and age, where technology and medicine has improved so much, that diseases which were difficult to treat and led to death are now easy to cure.
     
  19. wallet

    walletActive Member

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    I agree that even children should have a life insurance, because death is ruthless, and just as you said it can strike at any moment. Death is taking anyone, kid, adult old people, and we all should have a life insurance no matter the age we have!
     
  20. Happyflowerlady

    HappyflowerladyWell-Known Member

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    I also agree with what you have stated, @Alexandoy@Alexandoy , in as far as it is very important to have adequate insurance for the head of the family in case something should happen to them.
    There are two basic types of life insurance policies, one called whole life, where the premiums do not change as you get older, and term insurance, which is very cheap initially; but gets expensive as a person ages.
    Having a little of both if these policies is often a good plan. Getting a small whole life policy for a child is an excellent idea; because he will always be paying the same rates as it cost when he was a baby.
    Once the child grows up and has a family of their own, then a term policy for a larger amount of insurance is necessary, just in case he dies and the family is left destitute.
    However, as this person ages, and becomes a senior with no family to raise, and most of their debts paid for, all they really need is the small whole life policy that they have had all of their life, because it is sufficient for burial purposes.
     
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