[mommamarci]

Okay, I have signed up for all the coupons for diapers, formula, etc. as a result, I am constantly getting packages in the mail with all things pertaining to baby. One thing I have received several times is a paper about life insurance. (I don't think I can say what the name of it is since it is a proft thing. Not sure about that.) Anyway, the name is not that important. For a few dollars a month you can get life insurance for the child. The premiums never go up. So, I was telling a friend about it and she says it is a total waste of money. we could get it much cheaper if we go through a private insurance company. What do you all think? Is minimal life insurance (I am talking like $5,000- 10,000 just enough to cover expenses if something happened.) important? Did you get it for your children? I know I have too much time on my hands, so I come up with this stuff to ask you all. Thanks in advance for any responses!!

[mommamarci]

Just wanted to add: we currently only have coverage through our jobs for ourselves. It is enough for now and we are not planning to add to it for at least a few years, so we do not already have a policy somewhere that we could add baby to.

[sak9645]

I am not sure why anyone would need life insurance for a child, unless the child was a celebrity.

The main purpose of life insurance is to provide the beneficiary with a replacement for income lost because of a person's death.

For example, if the primary breadwinner in a family dies and has life insurance naming the spouse as beneficiary, the survivor will be able to use the proceeds of the policy to pay the mortgage and such, until he/she decides whether to buy a cheaper home, work more hours, or whatever is necessary (if anything) to survive under the changed circumstances.

Very often, if there is a married couple where only one spouse works outside the home, only the working spouse will be covered by life insurance. However, some couples in this situation also buy life insurance for the nonworking spouse, because if he/she dies, the survivor may need to purchase the services that non-working spouse usually performs, such as housekeeping and childcare.

In the case of a single parent with a child, the parent will usually purchase life insurance so that, in the event of his/her death, whoever assumes guardianship of the child will have the proceeds to use in raising him/her.

Some adults who are responsible for the care of elderly or disabled parents or other relatives buy life insurance naming these people as beneficiaries. Again, the purpose of the life insurance is to provide income for the future upkeep of these relatives, if the policy holders die.

Since a child does not generally earn significant income, and is generally not a source of financial support to his/her parents or anyone else, buying life insurance for him/her doesn't make a lot of sense. Yes, in the unlikely event that the child should die, there will be the expenses of a funeral, but those costs usually do not justify the premium of life insurance. And the parents' grief over the loss of their child will not be assuaged by even a significant insurance company payout.

What I would suggest is that you spend your money to buy larger amounts of life insurance for the breadwinner(s) in your family, and to upgrade your health insurance so that, if your child winds up with a serious medical issue, you can get the best possible care for him/her.

Some people do buy burial plots for their family and prepay other funeral expenses, so that, when the time comes, the survivors can give them the sort of funeral that is customary in their tradition, without having to worry about where the money is going to come from. If having a lavish funeral -- for an adult or a child -- is part of your tradition, and if you really want to plan far in advance of need, you can certainly set up a small fund for this purpose. However, I would say that most young couples with children probably don't need to do so, since a long life is more likely than an interrupted one at that stage.

Sharon

[nycfsa]

Sharon is exactly right. I used to price life insurance for a large insurance company (I'm an actuary). Life insurance on a child is unnecessary and not a good value for your money. As Sharon mentioned, it only makes sense if you're concerned about burial/final expenses, and there are other ways to fund that.

[kbuoni]

I feel differently about life insurance for children. One of the many reasons to purchase life insurance is to replace income. If one of my children died, it would be a long time before my husband or I would be capable of going about our normal daily routine, going to work or whatever. Our incomes would suffer accordingly. We have $50K life insurance on each of our children so that financially, we could take the time to grieve and not feel pressure that we might lose our home, retirement, whatever.

Our insurance agent also mentioned another benefit. It guarantees our children the ability to have life insurance. This way, even if they become diabetic, have a bout w/ childhood cancer, or any of a million other things that would make them uninsurable, they have at least this little bit of insurance for their future families.

Just my point of view.
Kim

[icunurse]

While I agree with Sharon, I also have to say that we do have a small policy for DS. I was able to get it through my former employer for, literally, $0.37/month - I doubt any insurer would be able to beat that. It was portable, so when I lost benefits after I became a SAHM, I could keep his coverage (and mine and DH's). I'm not sure if we could add the next child or if we can get a small policy through DH's employer or what. I would only get it if it is dirt-cheap, otherwise you do have to consider the cost vs benefit. For us, with the insurance being cheap and a small policy, it is enough to cover funeral expenses if God-forbid something should happen. I have a co-worker who lost 2 children in an accident and the small policy she had for each of them spared her family the great expense of the wake, funeral, etc. Scrambling for money during that time was the last thing she wanted to think about...

Just saw Kim's post and wanted to add this, too - I have another co-worker who has a daughter with a rare, but non-fatal disease. She has been deemed "uninsurable". The only policy she has or most likely will ever get is from the baby food company that also sells insurance You have up until the baby turns 1 to make a decision about that policy.

[mumofone]

Actually, getting life insurance on a child is a great thing to have. By having a policy, it insures that they "have" insurance. If, God forbid, they came down with an illness, at least they would have coverage even as an adult.

I hope to God, we never have to use our children's policies. We have them for their protection and the protection of their future families.

[StorkWatcher]

I'm going to do the one from the "baby food company" (to not name names) for a couple of reasons.

My parents did something similar for us. We then had the choice as adults to either keep it going (at a MUCH lower cost than I pay for my insurance through work and increased coverage from the original policy) or cash it in. That way I have more than one policy, and if I ever get to quit my job, will still have some coverage. I think my hubby cashed his in.

[mommamarci]

I don't want enough insurance to replace any lost income. I want enough so that I could give my child the proper burial that I think they would deserve. I remember when my grandmother died a few years ago it cost about $8000 to have the funeral and pay all the expenses. I don't think we need the added stress of coming up with the money for that along with the stress of lsoing a child. I am not trying to profit off of my child or 'make a buck'. I just want to be able to provide a good funeral. (Knock on wood that I will never need to do this.)

[NJNative]

I'm going to use this thread as a reminder to all of you. Do you have updated wills? If you don't, get thee to lawyer!

I am always shocked at how many people with children don't have wills. Do you want the court deciding who raises your kids? Or have family members fighting over the issue?

My brother and sister-in-law have two children, ages 12 and 6, and no wills. Drives me up a wall! We had our wills drawn up as soon as we adopted our son and had them updated a few years ago. Once he turns 18 in a couple of years, we'll update it again, since he won't need a guardian. (And because my husband now has two grandaughters we need to name in the will.)

Back to regular programming....

Robin

[WLD]

Totally agree with you. we updated ours this year. Husband procrastinated like crazy, so i finally found a lawyer, called and made the appointment, then drove to my hubby's job and picked him up and said we are going to get those wills updated today! He didn't balk at all.

[EmmaLeigh2882]

There are so many programs for the computer that can actually help you write up a will- untill you can get to a lawyer! ( Since we dont have kids yet we havent had a will drawn up with a lawyer yet- ever, but we have had many wills done with computer programs and update them all the time, as long as they get notarized they are legal.)

[mommamarci]

Originally Posted by EmmaLeigh2882

There are so many programs for the computer that can actually help you write up a will- untill you can get to a lawyer! ( Since we dont have kids yet we havent had a will drawn up with a lawyer yet- ever, but we have had many wills done with computer programs and update them all the time, as long as they get notarized they are legal.)

Could you PM the site for one of these programs? I have looked for them and not been able to fidn them. I know a notary so it would be easy to get notarized. Thanks so much!!

[EmmaLeigh2882]

Originally Posted by mommamarci

Could you PM the site for one of these programs? I have looked for them and not been able to fidn them. I know a notary so it would be easy to get notarized. Thanks so much!!

Just sent you a message.
I wanted to just remind everyone that when your children's future is involved, having a lawyer help you with at least the first draft is a good idea. You wont want to find out after the fact that something was writen wrong.

A computer program could help save some money though. It can walk you through a lot of the questions and help you write down what you want done- then bring it to your lawyer to have them make sure its all legal- and a good idea. At least on the first one... Naturally as you go through different stages in life your plans for the future will change- as may some of the people you would have wanted to take care of your children should something happen.

I am really big on trusts for all children under 25. ( they dont have to be a complex trust) As a trustee for my brother's and sister's trust- even though my brother is 25 and my sister is 29 it has been alife saver. Without that trust neither of them would have a prayer. Not because they are "lets go blow it" types, but just not mature enough to handle large sums of money. So slowly I am allowing them more responsiblity with the money- without them getting it out right. There have been some major set backs as well as progress! Again- thank God for the trust! Its not unfair, or distrustful of them- its being a responsible parent! If you care about them you will protect them- even from themselves...

I suggest you at least explore more about trusts. As the person setting up the trust- you say how it works! So you may want you 18 year old to get some money every month to see how well they do with it- maybe for 2 or 3 years. ( not a large sum maybe 300-500 a month) and have the trustee watch what happends- if they see your child is wise with the money- maybe give a little more. Or if a large need comes up and the child has been smart with the money and working hard to earn more on their own ( or go to school) but just doesnt have enough money to cover the need, then the trustee can choose to help out above the set amount.

( Message me if you want a little more info on trusts)

PS- I am not a lawyer. Just a been there done that person!

[NJNative]

Trusts are essential if you have a substantial amount to leave your children. And you don't have to be rich for that to add up. Your equity in your home, cars, insurance, savings, retirement funds...it can total up to a nice sum.

We have our trust set up so that my son gets a small amount of money (mind you, it's only if we are both out of the picture) at 18, a bit more at 21, more at 25, then 30, then 35.

Having trusts set up costs a bit more at the lawyer's, but it's better for the kids. Gives them time to grow up and become more responsible before they get a lump of money.

Robin