Should you buy life insurance for your children?

Having children is an integral part of some couple’s lives. When parents have children, it’s hard to think about what might happen if you were to pass away. Despite this, it is quite normal for couples who are expecting to invest in life insurance. Normally to help replace lost income and cover expenses if one parent were to pass away. However, in some cases, parents opt to get cover for their children too. But is life insurance for your children really necessary?

Life insurance to replace income

Life insurance is normally purchased by adults to replace any lost income, cover debts, pay off mortgages and pay for bills and living expenses if one spouse or partner were to pass away. This enables their family or partner to be able to continue a similar standard of living until they are able to make better arrangements. Often this can help to cover childcare, living expenses, transport as well as arrangements that need to be made after the individual passes away such as the funeral or change of mortgage contracts.

When a child dies, although the loss is devasting, the financial impact on the family is less due to the fact they are not bringing an income into the home. That is it is less likely that you would need to buy life insurance for your children.

However, there are a lot of parents who wish to protect their child against the future. Developing an illness in childhood or adulthood could prevent their child from getting affordable life insurance or any at all.

Life insurance to cover funeral expenses

The average cost of funerals can be anywhere between £3000 and £4000 in the UK. This statistic can be quite alarming for families who don’t have a huge amount of money. It means a great deal to a lot of families to provide a meaningful funeral for the family to mourn the loss of a loved one. Therefore, a life insurance policy for your children, in this circumstance, can help the family out. The lump sum paid out can be used to cover these costs rather than reach into savings or force the family into debt.

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To cover time off work

Losing a child can be really devastating for a parent. During this period of time, time off work may be needed to allow time to grieve. Ultimately, it depends on your family’s financial state and if it would be possible to survive monetarily during this time. Whilst life insurance for your child can be a good thing, it is important that you plan for other things first in the present. Things such as childcare, education and maintaining a supportive environment can take precedence over getting life insurance for your children.

Family medical history

If there are genetic conditions that run in your future, future illness can be a concern. Therefore, for a healthy child, the monthly cost of life insurance can really help provide peace of mind for the family. It also means that your child will be able to get cheaper life insurance, in the long run, to protect their family or spouse in the future. Having a serious condition can hike up the price of life insurance. So getting life insurance for your children, for this reason, can help protect them against the expensive costs later on in life.

Critical and serious illness cover

In fact, a better option for the family may be to get critical illness cover or serious illness cover for yourself and include your children in the policy. This type of policy can help to pay for medical treatment. It can also be used to cover time off work as well as additional costs such as transport and home care.

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Life insurance for children: protecting their future

The best way to protect your child’s future is to take out a life insurance policy on yourself. If you want the money to go to your children directly, the policy can be set up in a trust. You can choose a trustee who can give the money to your child when they are old enough.

Life insurance for children is often marketed to protect your children’s insurability in the future. However, the truth is if they are relatively fit and healthy, they can get affordable life insurance right up to their 30s or 40s. It is true that the price goes up with age, but your child may not actually need life insurance until later on in life.

Instead of paying for the premiums, you can use the money to set up an emergency savings fund. In addition to this get life insurance for the parents, save for education or add to your pension

Whole of life insurance for your children

The other option is to invest in a whole of life insurance policy for your child. This type of policy builds its cash value over time. This cash value can be borrowed against as it builds. This can help your children save for a mortgage or university. These types of policies are generally more expensive and there is an element of investment risk involved. However, if life insurance for your children is to protect their future this may be a more suitable option.

Most people find it difficult to contemplate the death of a child. Life insurance can be an unnecessary expense when losing a child seems highly unlikely. There are times when it may be appropriate for the family. Such as when you don’t have enough money as a family or if they are likely to become ill. Life insurance is a protection policy to provide a financial safety net. Getting it early on can help get affordable rates and help with financial costs for the parents. Getting life insurance for your children really needs to be based on your circumstances as a family.

For advice or a quote on life insurance for you or a family member, get in touch today with My Cover Expert.

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