Having a new baby is one of the most exciting moments in any parent's life. After your baby comes home and everyone gets settled, the question of life insurance will generally come up. One of the big questions is whether or not you really need a life insurance policy on your child. Here's a look at a few of your options.
While this is a personal choice for any family, there are several different ways to look at buying life insurance on your baby. Although the main purpose for having this type of insurance is to protect the family from financial ruin in the event of your untimely death, having a policy on your children is not a bad thing.
A small $25,000 policy gives your child more than adequate coverage and if you purchase a whole life policy, will actually build up a nice cash value that could be used for college or other events later in life. Not technically a savings account, it is a solid way to build a small nest egg.
On the flip side is the thinking that obtaining life insurance later in your child's life, such as their 20's when they leave home, is easier today than ever before. Again, it comes down to a personal decision.
There is nothing wrong with buying a small policy during these early years. The good news is that the premiums are next to nothing and it gives them a head start on the future. Once they leave home then they can purchase additional life insurance and assess their needs at that point.
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