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Should I purchase life insurance for my child?

 

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The primary motive for purchasing life insurance on someone’s life is to replace “lost” income or pay for expenses incurred as a result of the insured person’s death. There will be no lost income if your child dies, but there will be funeral, burial, and related expenses that could cost thousands of dollars, putting the parents of the deceased child in financial trouble.

Another reason to get life insurance on a child’s life is to protect against the potential that, when the child grows older, he or she will be unable to purchase life insurance due to an unforeseen sickness or event.

Another reason to purchase life insurance on a child’s life is as part of a program to teach financial responsibility to the child. The insurance is usually entire life insurance, which is passed to the kid when he or she reaches the age of 21.

Most insurance experts advise families to spend their insurance budget on life and disability income insurance for their parents first, before thinking about insurance for their children. The death of a parent, particularly an income-earner, can have far-reaching financial ramifications when contrasted to the financial consequences of a child’s death.

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