Life Insurance for Kids, is it necessary?
I remember this conversation I had with a neighbor a few months ago. While waiting for a shuttle, she talked to me and asked where I live and if I have an insurance already. I think I look so approachable that people just talk to me even though I barely know them. I’m not in a good mood at that time, so I just answered with “yes! my husband and I have insurance already”. She told me that it’s a good thing we are both insured but she mentioned that I should get one for my son too. I told her, that my son has a mutual fund and I think he doesn’t need a life insurance yet.
I am a believer in getting a life insurance for your own peace of mind. I even recommend this to my friends, families and relatives. I am saddened when most of them reply with “it’s hard to include it in our monthly budget” or when they believe that SSS is enough.
But why do I think getting a life insurance for young kid/s is not necessary?
First, because I don’t like the thought that we the parents are our kids’ dependent. That we will get monetary amount if something bad happened to them. I think I am the one responsible for my son’s well being so I should take good care of him until he reaches the right age to get his own life protection.
Your child is a liability, not an asset, and we should only insure assets. An asset is any source of financial value for your family. I think, if your little one is a superstar like a little Justin Bieber or Ryan of Ryan’s World, the famous kid toy reviewer, then I think that’s okay to get them a life insurance or if you have an extra extra extra amount of money. But other than that, I think that they don’t need it.
Just make sure you are insured first before your child.
I read this article of Randell Tiongson and I totally agree on everything he mentioned – http://www.randelltiongson.com/dont-buy-life-insurance-for-kids/
According to Investopedia on why you should not get life insurance for children:
“Life insurance is designed to provide a safety net for your heirs/dependents. Because children don’t have heirs to worry about and, statistically speaking, most kids will grow up safe and healthy, most parents should not purchase life insurance for their kids…”
I think it is not necessary to get young kids a life insurance because I would rather invest my money in a trust fund/mutual fund that they can use in their future.
And yes, that’s what my son has, a mutual fund
But for practicality reason, I personally would rather invest my money in a medium that will beat inflation for it to increase and use when the right time comes.
Kendrick Chua, on the other hand, explained why you should consider getting one in his article here – https://www.rappler.com/business/personal-finance/53179-getting-life-insurance-for-kids
What do you think?