There are very many debates as to the importance of life insurance for children and although some may argue that there is no good point in singing up to one there are those who would disagree. The main reason why those who argue for a life insurance for children is that they contend the money can be used as the child grows as a tuition fond or it can be turned into a lifelong insurance system with great benefits for its owner. However those who oppose the concept argue that there are far better ways of saving money for the child’s future well-being. Of course, as is the case with most human arguments it all eventually boils down to choice but in order to make that choice you need to know as much as possible about both lines of reasoning and then decide on taking one side or the other and either use a life insurance for children or not.
Those that would argue for a life insurance for children argue that a child is a much a human being as any adult and therefore is entitled to owning an insurance. And as humanitarian this appeal may be it is fundamentally wrong because just as you wouldn’t buy a pack of cigarettes or an adult size pair of jeans for a 5 year old so you may not need to set up an insurance policy. However the argument goes on and they are stating that you cannot be sure about the well fair of the child as he or she is turning into an adult and as an adult they may not be physically healthy enough to qualify for a life insurance. And as a child they may very well be in that perfect health that guarantees a good life insurance policy. And if you have a history of heart disease or diabetes in your family than that is certainly a reasonable concern that could be addressed with a good life insurance. And still it could also be addressed with a balanced diet and regular workouts so even if you do decide to go for a life insurance for children make sure you don’t forget these other 2 things that might keep your child from ever needing the insurance.
There is a very good contra argument for this motivation for creating a life insurance for children but before we go into that let’s first a look at the other strong argument for getting one. The salesmen who are trying to get people to use this insurance will also argue that the premiums can be used as a tax free fund in which you can deep for when you will need collage money. And again that is an impeccable argument because the premiums on life insurances can be rather large and can actually be access without paying any taxes for them. Still when you do decide to use them you should also know that you are basically guaranteeing that you and your child will be paying for that insurance for the rest of his or her life because the moment you will want to stop that insurance system you will have to pay those taxes. So although there is a good deal of truth in this claim there are some things to consider before your rush and buy a life insurance for children.
And there are even more arguments to be considered against a life insurance for children as those who disagree with the need for one will surely maintain. They will show how there are life insurances available for people getting close to their 75th birthday and so you don’t really have to worry about your child’s ability to get a life insurance in his 20s. Of course if the does get a disease like cancer or AIDS he won’t be able to get a life insurance but as far as cancer is concerned the insurance company will certainly look in to your family’s history and determine his chances of developing a cancer. In fact that is the best contra argument to the idea of getting a life insurance policy while the child is young. For the insurance companies his present state of health doesn’t really tell them anything so they will look into the health of the family to determine his chances. So in fact, except for the situation where he will actually get the disease the insurance company will calculate the same yearly bill as for the risk group he is in. So a life insurance for children taken out now will not pay any more and won’t have a stronger impact than one taken when the child his older.
And the fact is that a life insurance for children won’t actually pay out very much as most of them level out at about $5000 so the money gain is negligible when compared with the other means of saving money for you children’s education like a 529 collage saving plan, a Coverdell Account or a Uniform Transfer to Minors Account. And although all of these types of accounts are taxable they do provide a much firmer financial base on which your child can develop his life than the premiums of a life insurance for children.
Which leads us to the main argument of those against a life insurance for children which is that the entire purpose of a life insurance is to provide those who are left behind with a financial support for he income that has disappeared with the death of a loved one. In other words the entire purpose of a life insurance is to cover the expenses that the dead can no longer be accounted for and since a child does not bring any money in the home the question of the need for a life insurance is mute. Ultimately there is truth in the fact that you need to make sure to save money for a child’s needs as he or she grows up but whether the answer is in a life insurance for children is something that reason would indicate against but that the heart may wish for to strongly.