Is purchasing life insurance really necessary for a child? Some financial experts argue that money spent on life insurance for children could be better spent investing in college plans or other investment accounts. Here are three reasons why life insurance makes good financial sense.
- Final Expense: In the traumatic event of an early death of a child, a life insurance policy can provide proceeds to cover funeral and burial expenses. For many families, the cost of paying the burial expenses out of pocket could be problematic. The final expense costs can easily exceed $8,000. Not all clients have access to that kind of money to pay for a funeral.
- Medical Expenses: The death benefit can be used to cover medical costs that may exist prior to the child’s death. The top causes of death of children under the age of 18 are accidents and certain specific illnesses – both would incur medical costs.
- Insuring Coverage: Purchasing a life insurance policy for a healthy child is relatively inexpensive. If for some reason the child would develop a serious health condition later in life they may be unable to obtain coverage. Many carriers offer guaranteed insurability riders that allows for buying additional coverage with no underwriting.