High emotions flow when parents and grandparents plan the future of children. If you plan to purchase a life insurance for your child, it is highly recommended to analyze the overall situation before making a hasty decision on any offer.
Insurance agents often try to sell "special opportunities" that let you add children to your policy - opportunities that claim to make you believe agents that occur only once every few years. Subjected to pressure you so you can make an immediate decision. Braun Mincer, an award-winning personal finance expert, says consumers should be wary of policies for children, especially those that disguise you with life insurance rates of $ 1 a month.
"People do not suddenly wake up thinking you have to buy life insurance," says Mincer. "Life insurance is a product that is sold and not bought. People often buy insurance because an insurance agent or salesperson approached them and convinced them that they need."
Life insurance is primarily designed to protect your family from financial disaster in the event of your death. But children have no one to depend on your income.
"The benefit of insurability is guaranteed, so that if your child is diagnosed with a serious illness later that would disqualify him for any insurance policy, and would be exempt from any provision of pre-existing conditions," he says.
"It certainly provides a nominal usually around $ 25,000 in coverage," says Mincer.
According to the National Funeral Directors Association, an advocacy group for the profession of funeral services, the cost of the funeral of a child may vary, depending on the funeral. Even with a discount, the funeral could easily cost thousands of dollars. An average family might not have the means to pay any expenses incurred. That's where life insurance can help. However, "in statistical terms, the mortality rate of children is so low that it is difficult to justify this type of insurance usually used as a tactic to insurance agents call your door, intending to sell other types of insurance policies, "says Mincer.
Many of the life insurance policy sold insurance children have the option of the insured to buy additional insurance when it comes of age. While there are cases in which a child develops a chronic disease that would make them uninsurable later in your life, the reality is that most young adults can easily get low cost life insurance.
Buy with your head, not your heart
There are other options where to invest your money they can make more sense in the long term. For example, ensure the financial security of your child by obtaining a life insurance policy that will cover enough in the event that anything happened.
If you care about funeral costs, you can purchase a life insurance policy for himself with coverage for funeral expenses of your child in case of death.
In addition, "a savings plan for college is one of the best investments you can make for your child, and also receive tax-free interest," says Mincer.
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