Child and Juvenile Life Insurance: Three Reasons to Buy

Parents often question the wisdom of purchasing life insurancefor children. As children are generally not contributors to afamily's financial well-being, many wonder if life insurance isreally necessary. Financial experts will often argue that moneyspent on life insurance for children could be better spent byinvesting in college plans or other accounts. These perspectivespaint purchasing life insurance for a child as a foolhardyfinancial investment.These viewpoints, at first glance, make a great deal of sense.There is generally no compelling reason to obtain insurancepolicies with large payouts for youngsters. However, there areat least three reasons why life insurance for children can makesound financial sense.Final ExpensesIn the event of child's early death, a pre-existing lifeinsurance policy can provide sufficient proceeds to coverfuneral and burial expenses. For many families, the prospect ofpaying these expenses out-of-pocket in the event of catastrophewould be quite problematic. The relatively low cost of lifeinsurance for children can be a sensible way of providing peaceof mind regarding these expenses.Medical DebtsThe proceeds of a child's life insurance policy can be used tocover medical debts that may exist subsequent to a youngster'sdeath. Considering the high costs of medical care and likelyexpenses in excess of what may be covered by health insuranceplans in the case of serious illness, a juvenile life insurancepolicy's proceeds could provide a family with significantfinancial relief in the case of fatal illness.Insuring CoveragePurchasing life insurance for a healthy child is relativelyinexpensive. Should the child develop a serious medicalcondition while uninsured, however, parents may suddenly findpremium costs to be very expensive. As such, many companiesoffering juvenile insurance policies argue that getting coverageearly may result in significant cost-savings down the road inthe even that a medical condition or illness should developlater.Often, the idea of a life insurance policy for a younger childis quickly dismissed as a poor investment. Many look at theissue of life insurance for children through the same lens theyuse to approach life insurance in adults. They argue that lifeinsurance's primary purpose is to protect loved ones and familymembers financially in the event of the policyholder's death.They see life insurance simply as a means of income replacement.Since children do not significantly contribute to family income,they maintain that the purchase of a life insurance makes littleor no sense in the case of children.However, a more comprehensive look at the nature of lifeinsurance and its benefits reveals that purchasing some lifeinsurance for a child can make good financial sense undercertain circumstances. It can provide for final expenses, serveas a means to pay for medical debts, and can allow some lifeinsurance coverage to begin at a relatively low cost in caseswhere a later-developing illness or medical condition may makeobtaining life insurance for the child too expensive.