Life Insurance for Children
How much do you value your children?

I think life insurance for children is a topic that is rarely discussed. But I believe that the consensus among financial pundits is that it's useless. Suze Orman, a revered financial expert, says:

First, the only reason you need life insurance is if anyone is dependent on your income.

It's safe to assume that Suze Orman doesn't think that life insurance for children is a smart financial move. She goes on to say:

And please, you new parents, do not let anyone talk you into buying a life insurance policy on your child. Remember, the point of life insurance is to replace income that would be lost if the policyholder dies. Working from the assumption that your kid isn’t Dakota Fanning, there’s no need to buy a life insurance policy in your kid’s name, since your kid doesn’t produce any income you depend on.

The question is...

Could Suze Orman be wrong?

I say yes.

I like the way Robert Castiglione defines the word insurance in his book LEAP:

Insurance is the reimbursement for the full value of any item lost.

To me, this makes total sense.

Suze Orman says to insure a life if it generates income; Robert Castiglione says to insure a life if it has value. And everyone has value.

Why do people insure their:

  • Homes?
  • Cars?
  • Boats?
  • Jewelry?

Do these produce income? No, but they are of value. We advocate life insurance for children because it protects the value of their lives.

Life Insurance for Our Child

When our son was born, we got him a whole life insurance policy. It's not only for his benefit but ours too since we control the policy.

We got a PUA rider along with it to accelerate the growth and build our family bank.

The topic of life insurance for children is hardly discussed. When many people think of life insurance, they think of insurance to replace their income in the event of their death. Well, 9 times out of 10, a child is not the breadwinner in the family. So why get it?

I have a hard enough time convincing people to buy cash value life insurance, or even any life insurance for that matter. Convincing you to buy child life insurance may be just as difficult. But, you're here for personal finance education.

Of course, we suggest cash value life insurance for your child. And instead of getting hung up on the higher premiums, discover the possibilities.

Oh The Possibilities

  • Safe. The cash value grows in a vehicle safe from creditors. It's because the benefits in the policy is to benefit someone else.
  • Insurability. Young infants often do not have any illness that would disqualify them from life insurance. Once a child is insured, no matter what happens to his/her health, he will always be insured. It's guaranteed. To add, if there is a disease like diabetes or cancer that runs in the family, once the healthy child is insured, he will always be protected. This protects the child from having to pay higher rates in the future, should he develop diabetes or have cancer.
  • Cheaper. The premiums are cheaper and they will never increase. Who doesn't want to pay these premiums with inflated dollars? Imagine always paying 99 cents for gas, because the price will never go up.
  • Savings.It can be utilized as savings for his first car, an alternative to college savings plans, or even a down payment on a new home.

Life insurance for children is not only a smart way to protect your child's value, but it's an excellent way to build wealth.

If you still side with Suze Orman, then child actors in Hollywood are the only ones that should get child life insurance.

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