If we could pick one of the most anxiety and depression inducing financial topics, this could easily be it. NO ONE wants to think about having a need for life insurance on their child- and understandably, no one wants really wants to talk about it. In this article, we will outline the pros and cons to having a life insurance policy for a child and leave it up to you to consider whether this is a necessary policy for your family or not.

Some may ask why a person would need to purchase life insurance coverage for a child. Again, this will be unique to each scenario. For some, being able to buy whole life insurance for their child at a very early age feels like a loving gift they can give that will benefit them later in life. While sounding a bit morbid, some families with strong histories of addiction or early death choose to purchase life insurance for their children at a young age in order to offer protection for them if they are unable to qualify later on in life due to possible factors later in life. Other families purchase insurance because of an illness their child has, making it likely they will need the funds for final expenses at some point in time. If a child is already ill, you would likely need to look into a sort of guaranteed life with a smaller payout that would not limit eligibility based on health (always consult with a professional.)

This is a hotly debated topic, as one can see how purchasing life insurance for a child (especially if they are not ill) can come off as strange to some. Insurance companies use the reasoning of protecting children from uninsurability later in life, however, there are reasonable arguments to counteract this. For the amount a person would pay into a life insurance policy over time, it may make more sense to start putting away the funds into an account for a child without the event of death being a trigger for cashing out. Even with a whole life policy that has a cash component, it is argued that the money spent on premiums would be better spent on a different type of savings account with higher interest.

If you are looking to cover funeral expenses for a child who is not ill, it may not be necessary and the funds may be used better elsewhere for savings. Statistics show the chances of death for a healthy child are relatively low, and planning for it with life insurance may not be the best way to save if that is the sole purpose. However, if purchasing life insurance for your child gives you great peace of mind, then it would be a personal choice to move forward and may be of benefit to you.

The larger purpose of having life insurance is to cover the income of the deceased in the case of death. This financial coverage would go toward supporting the family and dependents of the departed. Children don’t have dependents that rely on them for income typically, making the expense of insurance seem unnecessary. The decision to either purchase or not purchase life insurance for your children is a sensitive one and would be best discussed with a trusted “fee-only” financial advisor. It would be advisable to not talk to *just* an insurance broker about the need, because their job, after all, is to sell you insurance. If you are in a position where the money is tight and you need to choose between life insurance for an earning adult (or 2) or for your children, most times the better bet will be for the adults in the house to protect the income of the family.

Many experts will advise that life insurance for a child is not normally necessary, however, there may be instances where it would be advised. If you think you may be in a specialized scenario, be sure to seek help with the loaded and emotional question.