Should I Buy Life Insurance for My Children?

Buying life insurance for a child is not for everyone, but it can be a wise choice depending on your circumstances. The team at Don Allred Insurance is always ready to discuss these issues with you. In the meantime, let’s review a few pros and cons.

Pros

• Relatively Inexpensive: Life insurance for children is inexpensive compared to policies for adults. Buying a policy allows you to lock in low rates, which are lowest for younger children.
• Guaranteed Insurability: Paying your premiums means your child will always have life insurance regardless of their future medical status. This can be critical if your child or your family has a history of medical challenges.­
• Cash Value: All life insurance policies for children are whole-life policies, so a portion of the premiums builds cash value for the future.
• Final Expenses: In the unlikely event of your child’s passing, money will be available to handle the arrangements.

Cons

Long-Term Commitment: Premiums are payable for years or decades, so buying a policy makes the most sense if you are confident you will always be able to make the payments.
Low Rate of Return: Other investments typically have higher returns than life insurance. It is often better to safeguard your child’s future by ensuring the proper level of life insurance for yourself, your spouse, or others.
Coverage Limits: The total value of policies for children typically are capped at less than $100,000.

Contact Don Allred Insurance

Buying children’s life insurance can be a good choice for some families. Medical status, financial resources, and the other arrangements you’ve made all come into play. As always, the Don Allred Insurance team serving Burlington, NC can help you consider whether children’s life insurance makes sense as part of your broader insurance coverage.