UPDATED: Nov 14, 2011

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Written By: Laura BerryReviewed By: Daniel WalkerUPDATED: Nov 14, 2011Fact Checked

Generally, there are two camps in regards to insuring children. Both make points that are equally valid, and depending upon your specific situation, your choice will vary.

One school of thought suggests that insuring your child is a waste of money.

Life insurance is primarily designed to cover funeral expenses or serve as alternate income. Children do not have any income to replace, and their death actually lowers the overall expense of the family so funeral expenses are easier to budget for than when the main financial provider passes away. Additionally, it’s statistically much less likely for a child to die before his parent; although accidental death and sudden disease do claim many lives each year, the vast majority of deaths are people well past their middle age. From a functional level, then, purchasing life insurance for your son may not be reasonable.

Indeed, your son may not choose to buy his own life insurance until he is married and has children of his own. Students and single young adults do not have the same need for insurance as people with families, and may be better off investing that money or putting it toward paying for education or other expenses.

The second philosophy about insuring children focuses on the ease of obtaining a policy when someone is young and healthy.

Policies are difficult, sometimes even impossible, for people with preexisting health conditions to receive. If your son is at high risk of any rare or serious medical conditions, insuring him early may provide security later in his life. For example, children who are born premature may be at a higher risk of certain medical concerns, as are children born with lowered immune systems.

Of course, not all families have savings set aside to provide for funeral expenses for their children. For some families, an inexpensive life policy can provide tremendous financial relief in the event of a child’s unexpected death.

Additionally, some life insurance policies can be used to pay for end-of-life care for terminally ill patients, including children. For example, if your child has terminal leukemia or another kind of cancer, life insurance benefits may be payable in the end-stages of the disease to pay toward medical care. Even if you cannot access your son’s life insurance policy while he is alive, you can use the policy benefits to recover health expenses from a prolonged illness and help to recover from the extreme financial setback of terminal medical conditions.

Some insurance policies geared toward children also have a savings component that can be used to save money for a college fund. While this may be a great feature for a parent who planned to insure her child anyway, if your primary goal is saving for college, you would be best investing the money in another type of account with higher returns.

Another item to consider when insuring your child is that when the child becomes older, he will be unable to cancel the policy: Only the person who took out the policy, not the insured party, can cancel a life insurance policy. If your son decides down the line that he would rather pursue insurance through a different venue, it may be difficult for him to do so.

Overall, the vast majority of parents will never need to insure their sons or daughters. In some situations, however, it can be prudent to do so, especially if the child is at high risk of any kind of medical condition that will make receiving insurance later in life difficult. If you are able to purchase life insurance at an extreme discount as part of a bundled policy, it may be worthwhile to take out a policy on your son. Otherwise, the money spent on life insurance may be better invested in a college fund, or spent toward health care and good nutrition for your child to forestall any possible medical expenses later in life.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Car Insurance Agent Daniel Walker