There’s always a lot of debate as to whether purchasing life insurance on a minor is appropriate. In some cases, parents feel this is either morbid or a waste of money and refuse to consider the idea. However, there are a multitude of positive reasons to show why this is actually a good thing. Here are a few benefits to purchasing a life insurance policy for your child.
Life Insurance Pays for Funeral Expenses
It goes without saying that you want your child to live a long and fruitful life. But unexpected accidents do occur every day, leaving grieving parents to sort out the details of planning a funeral. Plus, the last thing you want to think about after losing a child is how to pay for unexpected costs. This is where having a small life insurance policy on your child helps. Expenses for burials can cost several thousand dollars and having coverage in place can assist with those costs.
Future Medical Issues Can Raise the Cost
The general line of thinking about life insurance is buy when you’re young and healthy. This is certainly true when it comes to your child. Purchasing a whole life insurance policy while they are still little and healthy helps. It can often lock them in affordable rates and provides coverage well into adulthood.
For Use as a Savings Tool Later
One unique thing about a whole life insurance policy is that it accrues a cash value. This means that, as long as you make the premium payments, the policy owner can borrow against it for things like the down payment on a home, college tuition, or starting a business. In some cases, having this policy in place is an excellent way to jumpstart your child’s future in young adulthood while still offering protection.
A Good Addition After Taking Care of Yourself
It is important to remember that taking care of yourself financially is more important than taking a life insurance policy out on your child. Make sure that you have coverage to protect them in the event of your death first, then decide on whether to purchase additional coverage.