Life Insurance for Kids

[Pollito916]

OK, just looking for the opinions of some DISers on whether or not life insurance is needed for your kids.

I understand the amount would be significantly lower than for myself or DH, just enough to cover necessary expenses is that right?

Also, I know that it can help my son to ensure the ability to be covered for life, even if he has health problems down the road. For that to be true, do I have to purchase whole or will term have the same result? Would he have to purchase new insurance when the term is up, or would he be able to extend the same policy with the lower rates? Is there any benefit to a variable life policy?

As long as I am asking, does anyone know anything about college investment plans? I know they are cheaper the earlier you start, so I want to get started soon. Do you have any recommendations? What if he doesn't end up going to college - can the money be used for something else?

 

[dreamn_Disney]

Both of my children got whole life policies before they were a year old. They have the option of adding on at different ages like 25, 35, etc with no questions asked. It was a good thing we did this because dd was diagnosed with asthma and will have a very hard time getting insurance in the future. It is very little money at a young age and also builds cash value.

 

[Hannathy]

You only need life insurance if you will leave someone dependent on you. Who does a minor child have that is dependent on them for income. Put the money in the bank and if you heaven forbid ever need it it would be there and you can always use it if it isn't-and chances are extremely great it would never be used for that.

 

[HookdonWDW]

OK, just looking for the opinions of some DISers on whether or not life insurance is needed for your kids.

I understand the amount would be significantly lower than for myself or DH, just enough to cover necessary expenses is that right?

Check your life insurance policy. My policy automatically provides basic life insurance (enough to cover funeral expenses) for any children I have or may have in the future. This is included at no additional charge.

 

[PatsMom]

Children don't need life insurance because they don't have anyone dependent on them. Cash value insurance is generally an extremely bad way to save for higher education expenses - you would be much better off to fund a Section 529 plan. The only potential benefit to insuring a child is the future insurability issue - if the child turns out to have a chronic illness. However, the amounts of insurance available for children are typcially low and if they have the ability to add on, the amounts are usually small relative to what an adult needs for insurance. The insurance companies aren't stupid, they know taht the only ones who will typically add on are those with health risks so the premium costs for the add-ons are typically very high per thousand. And for a child you would have to use cash value - there may be a company writing term insurance on a child but I can't think of who it might be. Some companies will automatically cover a child for a small amount on an adult policy. and many employers offer group term life on children that is extremely cheap.

 

[MSSANDRA]

Our son was given a nice policy by both of his grandparents. We had planned to follow the "expert" advice that kids do not need insurance. However, my dad died last month and that made me quite aware of the expense involved in final arrangement plans for anyone. If heaven forbid something happened, it would be nice to not have to have the worries of paying for the way you choose to say good-by.

A friend of mine also pointed out that in the horrific situation of loosing a child, how might your entire lifestyle change. Many working moms or dads simply can not cope with going back to work, often for quite a while. That is another way insurance might be helpful.

Our DS also has ashthma so if he is unable to get any other life insurance, his child pollicies might be good but in reality most companies provide insurance for thier workers.

I agree to check to see if he is covered under your pollicy. DS and I are covered under DH's pollicy, but my coverage is not what we need to pay off our home in case of my death so we decided we needed more for me. DH is well covered.

it really is a toss up.


For education- Talk with your banker about a tax defered education plan.

 

[Pollito916]

Thanks to everyone for the opinions. I still can't seem to make a decision, b/c you all make good arguments for each side. I understand that it's not the best investment option, especially for educational purposes, and am looking more into a 529 plan or something like that.

BTW - for those with children with asthma that are worried about getting insurance - I have had asthma since childhood and had no problem obtaining a life insurance policy.

 

[angwill]

My son has his own policy through state farm. We pay $20 per month for 10 years for a $20,000 policy. After 10 years it is paid off and he will have it for life. I look at it this way, $2400 is a good investement to us because if anything were to happen a funeral in our area averaged $10,000 8 years ago when my father died. I pray nothing ever happens to our son but if it did I would not want to worry about financing a funeral on top of all the grief. The plan is that our son's family will eventually be the holder of the policy so they wouldn't have to worry about financing a funeral either.

HTH, Angela

 

[Aristomommy]

My MIL is a financial planner, and she set up our term life insurance policies with a child add on feature. It is maybe $10k per child for final expenses should those become necessary. I would not use life insurance as a investment option, you will do much better setting a separate college fund for them.

 

[LuvOrlando]

DH & I both have policies independent of employment. I have both of my kids as riders on my policy for $5/month. This ensures that both of my kids will have a minimum of coverage at 21 because at that point they are guaranteed their own policies by my insurance carrier in a multiple of their current coverage. In my case I'm very lucky I did it because, as it turns out, both my kids have Asthma which makes them virtually un-insurable. I didn't cover my kids because I felt they needed coverage now. Rather, I did it to protect their futures... and my future grandkids.

 

[CleveRocks]

The only reason we have ANY life insurance for our kids would be to cover funeral expenses, God forbid.

I advise the same to clients of mine who are unmarried and are without any dependents. Get a small life policy to cover your final expenses so you don't end up financially burdening a relative. But beyond that, I ask them, do they really want to pay their own money now so that someone else who is in no way dependent on them will reap a financial windfall in the case of their death? Nonsense!

 

[WDWorBUST]

I really struggled with this decision too. I got DD's term Gerber Life policy before she was a year old. After I had her I had thyroid issues resulting in high blood pressure for a while (it was a symptom of something else so it didn't stop me from getting a policy), however that was a wake up call for me that I could potentially have had an issue as a young healthy adult that would keep me from getting life insurance. I got her a small, cheap policy that she could keep forever that would guarantee her future insurability even if it's a smaller amount it would be something. I can't remember specifics. But that was my reasoning. I did an add on to my policy at work because it was cheap and I know that should something happen to her I would not be capable of doing much of anything for a while and the less things I had to worry about the better.

 

[SeptemberGirl]

When we got that Gerber sales pitch for life insurance, we looked into whole life policies. We did not go with the Gerber policy, but another one. Actually my dad pays about $300 a year for whole life insurance for my child, with an option to add on any policies when she gets older. We're happy with it, not just in case of the unthinkable, but because for a relatively low cost, she now has whole life insurance which will last her entire life and she will always be able to buy more life insurance.

I say do what feels right to you and what you can afford.

 

[LuvOrlando]

The only reason we have ANY life insurance for our kids would be to cover funeral expenses, God forbid.

I advise the same to clients of mine who are unmarried and are without any dependents. Get a small life policy to cover your final expenses so you don't end up financially burdening a relative. But beyond that, I ask them, do they really want to pay their own money now so that someone else who is in no way dependent on them will reap a financial windfall in the case of their death? Nonsense!

Huh? I think I must be misunderstanding you here.

I am the beneficiary and I am certainly not looking for a financial windfall in the case of the loss of one of my kids. Thats just twisted so I know I must be misunderstanding your point. To whom are you referring when you mention a windfall?

 

[meandtheguys2]

We have life insurance on our kids. If something should ever happen to one of them, it would throw our lives into chaos. I can't imagine my husband picking up and going to work the next Monday. With the insurance, we would be able to do whatever our family needed to do should this happen.

While we have savings, it would not be able to cover us for a year without tapping into our retirement or other investments.

 

[CleveRocks]

Huh? I think I must be misunderstanding you here.

I am the beneficiary and I am certainly not looking for a financial windfall in the case of the loss of one of my kids. Thats just twisted so I know I must be misunderstanding your point. To whom are you referring when you mention a windfall?

I specifically said I was referring to adults without any dependents. If Bob lives by himself and no one depends on Bob's income, then Bob doesn't need a whopping big life insurance policy that will make his sister or nephew rich. He just needs enough life insurance to cover his final expenses so that his sister or nephew don't feel obligated to spend thousands of their own dollars on Bob's final needs.

This logic can be carried over to kids as well. For our own kids, we have just enough insurance to cover their final expenses. Since our kids don't support us financially, our financial need in the horrible event of their deaths would be limited to their final expenses.

In contrast, my wife and I have sizable life insurance policies, because we both provide income for the household. In addition, we both perform vital childcare and household duties. Were one of us to die, the financial loss would not only be lost income, but also the added expense of paying someone to perform the childcare and household duties that the deceased spouse was responsible for (e.g., hiring a housekeeper and/or nanny, where none is needed now).

I had no "twisted" thoughts at all!

 

[mickeyfan2]

Thanks to everyone for the opinions. I still can't seem to make a decision, b/c you all make good arguments for each side. I understand that it's not the best investment option, especially for educational purposes, and am looking more into a 529 plan or something like that.

BTW - for those with children with asthma that are worried about getting insurance - I have had asthma since childhood and had no problem obtaining a life insurance policy.

I too have asthma. The problem is most companies only allow you one "problem". So you use it up with asthma. If you develop another problem then no insurance. BTW This just happened to me and I could not get another plan. DH and I both signed up for a different insurance, he got his (no "problems") but I was denied since I used my free "problem " for my asthma and they would not cover me for the other.

 

[hebbynan]

We have whole life insurance on both DH and myself. The amounts are 150,000 each and we earn interset off the investments. By the time DH and I are ready to retire, we will have our 150,000 life ins each and I will have acrued about 170,000 that I can use for retirement. DH's will be slightly higher as he's a more 'risky' investor than I am. As for my boys, we have a 5,000 Gerber policy on each of them. This is mainly just for burial costs should, God forbid, something happen to them. We mainly wanted life insurance on us in case something happened to one or the other, so the one left could remain in the house, pay bills, etc. We're not looking to set our kids up for life. Just to be comfortable in case something does happen.

 

[Suzanna1973]

Double post

 

[Suzanna1973]

My DNephew(age 15) was killed by a drunk driver while walking home from a friends house less than a half mile from his home on November 23, 2005. It was his mother's(my dsis) 42nd birthday. Luckily she had life insurance on him to cover the expenses. Do yourself a favor, get life insurance.

I have 10,000 on each of my kids. The cost is $10 per month for both. It can be carried over to them when they are 21.