Why do parents buy life insurance for their young child?

The insurance salesman babbles about this and that of the benefits of life insurance for the whole family and for your beloved children.

One thing that motivates parents to diligently pay even exorbitant premiums to insurance companies usually has nothing to do with death benefits, but the desire to be remembered by loved ones for doing something noble, something heroic, and something angelic (divine).

The trill that policyholders have when they believe that even upon their death, the relatives left behind will be adequately cared for and not left destitute for lack of money, because the insurance companies are obligated to pay claims to the beneficiary upon death.

Now what do the claims consist of?

1. Cash Value:

The cash value is the amount that the policyholder has accrued within the policy during the term of the policy. This fund is also referred to as: account value, equity or surrender value.

2.Policy Amount:

The amount of the life insurance policy is the death benefit, benefit or risk amount. This amount is much more than the total premium paid when the policy was active.

The total constitutes the claim.

It is clear from the above that life insurance is for incomes.

Despite repeated debates and posers discouraging the purchase of children’s life insurance, many parents still think it is worth buying life insurance for their children. Why are parents still doing this? They love their children and because they care about them and are willing to risk something valuable on their behalf.

If you are determined to get insurance for your kids you are not alone in this venture other well meaning parents are doing this and I wouldn’t hold you back if it makes you feel good but you have to insist are buying maximum protection at low cost term life insurance because the premium is low and also affordable, but as their age increases so does the premium. When the time comes for the bounty to become monstrous, check out other options.

It may not be sweet advice to buy insurance for your children as it defeats the sole purpose of life insurance which is to protect the breadwinner or some other better way to protect dependents from loss of livelihood. More than that, children hardly bring in any income, it becomes a bad idea to buy one for their benefit. However, if a parent wants something for the children’s future, they can put it into an annuity or other investment vehicles.

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For more tips and advice on other investment options see Personal Insurance for details

For the parents who don’t feel like being open about child life insurance and are conservative, they should provide adequate health insurance for the children if Medicare employment does not extend to their dependents. It will indeed be a costly undertaking to completely leave your children away from any kind of coverage.

Term life insurance can range from:

1. Premium term level

2. Annual Renewable Term

3. Expiring Term

As a parent, make sure that whatever investment choices you make in child insurance teams impact the overall well-being of your family.