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Why Life Insurance for Children Is Not a Good Idea

Updated on October 25, 2012

First of all let’s start by defining what life insurance for children is. This is a mutual agreement where by one party agrees to pay a certain sum of money upon the occurrence of a particular event dependent upon the duration of a child/human life, in consideration to pay a small sum immediately or doing periodical payments by the other party.

In subject to life insurance for children, the insurer shall pay the total amount specified in the policy according to the terms there off.

Life insurance for children is a topic that is much debatable but according to research, it is considered to have more disadvantages than it is for its reward.

Some of the disadvantages include;

  • Children have no dependents that will call for financial care the moment they are gone. Given that life insurance is considered for the concern of the loved ones who are dependent on you the moment you are gone, therefore its not intellect to pay for a life insurance plan for a child.
  • Life insurance for children is believed to be a waste of money since it hardly ever return lost income. Parents are discouraged from using life insurance for children and encouraged to use better ways of saving money, for example college funding.
  • Life insurance is a permanent life polices and it is believed to grow slowly. Normally, the policies are purchased in petite amounts that twenty years later do not amount to much.
  • It is not for everyone. It is for people with disposable income therefore believed to be an over whelming experience.
  • It is tedious and time consuming since one has to take so much time in order to comprehend what is on offer and making sure the right policy that will meet the need of the family or individual is chosen.
  • Life insurance for children is believed to protect one from estate tax and provide income when one cannot. You do not need to worry about life insurance for children since they do not need income replacement or estate tax issue. They are confidently too busy being kids. Also they are not out there to earn a significant sum of money, so why would anyone need life insurance?
  • Fewer benefits. At the same time as the emotional impact of the young child dying is not calculable; the financial bang is insignificant for nearly all people. Unless your youngster earns an income with the purpose of being replaced, the most important reason to have death benefits is to forfeit the monument and funeral expenses.
  • You have no idea if your child might develop a disability, chronic illness later on in life, therefore making it hard or impossible to acquire life insurance at the time when it is needed the most for example when your child is a parent.

In conclusion, it is important for a parent to consider everything before taking the step of purchasing life insurance for kids.


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