Why I Decided to Buy Life Insurance for My Young Children

Given that life insurance is specifically designed to protect against income losses, financial specialists often argue that it is unnecessary for children because they earn little or no money. Some also claim that life insurance policies for children are poor investments, reasoning that it’s better to spend the money on other things to help the child.

However, there are reasons to consider insurance plans for your kids. Because of what they could cost my wife and me in missed earnings if the worst happened, I have policies for all three of my sons. A policy also protects you financially from debts and other expenses that might arise if you lose a child.

To sum up, getting your children insured protects you from the terrifying prospect of losing them and then having to deal with the financial consequences while still dealing with the emotional trauma.

Continue reading for a breakdown of my reasoning for purchasing the policies for all three of my sons before each turned one. I also understand that certain parents do not want or need to purchase such insurance policies. I provide some advice on reaching a decision based on my 16 years as a life insurance agent.

What made me get insurance for my children started with a tragedy that occurred close to me. A couple of years ago, two of my good friends lost their one-year-old daughter. The family’s breadwinner, who was devastated, couldn’t return to work for almost two months. He was not compensated during this period, so the loss was both emotionally and financially devastating.

When my kids were born, I feared that same scenario. Many companies have bereavement leave, which allows workers to take time off when a close relative dies. However, the employee is not entitled to pay during this time off in any state. I was concerned that if one of our children died, my wife and I would lose income during the weeks or months we could not work due to our grief.

I figured that a $50,000 policy on each child would provide us with three to six months’ worth of income. However, a package that increased the coverage to $100,000 cost just a few dollars more per month in premiums. So, that’s what I went for. The policy was just $9 a month, which was an incredible bargain. Although I’ve seen pricing as low as $3 a month for a $5,000 policy, a $20,000 policy typically costs $12 to $14 per month — enough to cover at least a month’s worth of missed wages and some other expenses.

Of course, certain parents may have excellent job benefits that will continue to compensate them through a lengthy bereavement. Or some may have the financial resources to go through a lengthy period with no income easily.

Neither of these is my case. My children are now 7, 10, and 12 years old and healthy, while I still gladly pay their life insurance policies. 

The harsh reality of losing a kid includes the need to say goodbye to them and the financial burden of making such arrangements. According to Choice Mutual, a funeral with burial and viewing will, on average, cost you $7,360 in the U.S. 

Although my wife and I were both well-paid when our children were born, such an expense would have drained a significant portion of our savings. Our situation was similar to that of other parents of our generation. According to a new study by The College Investor, today’s Millennials (19-37 years old today) have an average net worth of only $10,400.

Again, if you have more money than the average parent with young children and can handle a hit to your savings with ease, insuring against potential funeral costs may not be a top priority. However, if a $7,000-plus funeral bill is out of reach, as it was for me when my boys were born, this possible cost might be another reason to consider purchasing a life insurance policy for your children.