General Question

jca's avatar

Why do people buy life insurance for their babies and kids?

Asked by jca (28713 points ) April 9th, 2012

I understand why people insure their own lives, so their family has funeral costs covered, and to ensure that their children will be provided for in their absence.

However, I can’t understand why people buy life insurance on their babies and children. Do you?

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8 Answers

ragingloli's avatar

They too need to be buried/burned/recycled, and that probably is not cheap either.

jca's avatar

I should have added that it’s more likely that adults will pass away, but not likely that a child will die.

downtide's avatar

These policies, if taken out at birth, usually mature and pay out at around the age the child starts university. I had such a policy when I was a kid, but as I never went to university, the money helped finance my move out of my parents’ home.

JustPlainBarb's avatar

It’s called insurance for a reason. You buy it to insure that you’ll be able to provide a decent funeral for them or help to pay for huge medical bills that might not end up being covered by health insurance.

You never expect children to die before you, but realities are that it happens. You don’t want to think about it .. but it’s a good thing to do if you are able.

With certain types of life insurance, it can be a savings account if they don’t die too.

wundayatta's avatar

I think it is designed to cover funeral expenses (as others have said) and to cover other expenses associated with the death of a child. You may be unable to work for a while. You may have mental health bills, and who knows what other expenses could result from the death of a child. Usually I don’t think the coverage amounts are that great—usually less than your own annual salary, I think.

WestRiverrat's avatar

Long term, it can make life insurance cheaper for the child when (s)he becomes and adult. It also will cover the expense of a funeral in the event the child dies.
As stated above some types of insurance act as savings and investment tools.

It is also a good idea to cover a nonworking spouse. If the nonworking spouse dies, housekeepers and child care can be a crippling expense if you are not prepared.

JLeslie's avatar

People gave good reasons above, funeral costs and time absent from work to cope. Also, it is very very cheap usually.

srmorgan's avatar

I am a.licensed life insurance agent in the state of North Carolina.

I worked for only one company and my experience is limited to that company.

We would only sell whole life policies for insureds under 21. The premiums are very low due to the expected lifetime of a young person. Whole life premiums never increase or decrease and they build cash value over time.

I believe that we would not accept applications for any child under six months of age.

Most of what I sold were small dollar policies, under $10,000, usually meant to cover “final expenses” such as funeral and burial costs. The cash value on a policy in this range is not going to provide investment income or cover college costs. The face value of the policy is just too low to do that.

But customers insured their children and grandchildren all the time.

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