Why Should You Buy Life Insurance for Your Children?

No parent could ever conceive the thought of outliving their children, and it’s just too emotional a concept to bear. But the one consistent detail about life is that there are surprises around every bend; sometimes, those surprises aren’t happy ones. The untimely death of a child is one of those instances. As harsh as it may seem, at the time of a parent’s most extraordinary emotional turmoil, they also have to deal with some cold, complex financial realities. Not everyone should buy life insurance for their children, but maybe you should.

If the child had an extended illness, chances are there are medical bills to be paid because health insurance coverage may have expired. There can also be bills for treatments and procedures not covered by the family health care plan. In addition to these expenses are the ever-rising costs associated with burial. Parents will want to give their children a nice funeral because it is the last thing they will ever be able to do for them. Part of the burial cost may also include purchasing a final resting place for the child if the family doesn’t currently own a burial site.

Do you have enough assets?

Even if the parents have sufficient personal wealth to cover any final expenses of a deceased child, life insurance can still be helpful. The proceeds from a life insurance policy can be used to donate to a charitable organization in the child’s memory. It can also be used to set up a scholarship fund at the child’s school, so deserving students who are financially less fortunate can continue their education. Other parents may establish their foundation to encourage research to find a cure for the child’s illness. All of these uses help ease the grief of the child’s passing because parents know that from that sad event, some good will come.

While the proceeds from a life insurance policy are usually connected with after-death events, they don’t have to be used that way. Insuring children while in good health means they will have life insurance throughout their lives, even if they develop medical conditions in the future. If the policy includes an additional insurance rider, the child will be guaranteed the ability to purchase additional insurance as an adult at specific times. Premiums for face amount increases will be based on the child’s health status when the original policy was purchased, even if the child has current health problems.

And finally, life insurance can be used to finance life events. A college education, a dream wedding, or purchasing a first home can all be made possible by life insurance. Adult children have a significant cash reserve at their disposal because of the accumulated cash value of that life insurance policy. Mom and Dad had the foresight to purchase all those years ago.