Should you buy life insurance for your kids?

Dear Pete,

Our insurance person thinks I should buy life insurance on my children, but I’m not sure I want to do that. My kids are 5, 7, and 12 years old. Do people buy insurance for their kids? Why would I want to profit from tragedy? The whole topic makes me uncomfortable. Am I missing something here?

Barb

Thanks for asking Barb. I have life insurance on my kids, but it's through a rider on my own life insurance policy. To me this is a simpler option than going out and buying a separate policy for each of my kids.

Here's the short answer why I think you should have life insurance on your kids: in the event of this unspeakable tragedy I don't want you to scramble for cash to cover the cost of final expenses. Unfortunately, I've been in the place where I've seen this scenario play out. The financial ramifications of this situation just extended the reach of the tragedy. It was financial pain layered on top of every other type of pain. And it's definitely not about anyone benefiting. Life insurance for minors is very different than life insurance for adults. Life insurance for adults is meant to replace earned income, children's life insurance is meant to help cover final expenses.

Most adult life insurance policies will allow you to add a child life insurance rider for around $6 a month for around $10,000 of coverage. By the way, this is $6 total, not per kid. It's $6 if you have five kids and it's $6 if you have one kid.

A secondary benefit to purchasing life insurance for your kids is it in some ways guarantees their insurability for the remainder of their lives. As we age we all become less insurable, but if your child has life insurance from a young age it can ensure they continue to have life insurance on a permanent basis.

Purchasing life insurance for your kids is a really simple way for you to prepare for whatever the future may hold.