Back in the day when I sold insurance, another lifetime really, people would ring up and ask about all kinds of insurance; auto insurance, life insurance, contents insurance, etc, there always were questions to be fielded and answered.
One question was when should someone take out a life insurance policy. My response was as soon and as young as possible really. The younger a person is, the lower their premium can be for a life insurance policy.
In speaking to people about this and understanding the value of having such a policy in place, I would also explain to people why having a life insurance policy on their children, even those newly born, can be an asset to them later in life.
It may seem a bid morbid to think of such things, but it is all about planning for our children. We plan and save for them to to go University, and other educational needs, why not plan for their financial future and insurance is a solid starting point.
Let’s start with why a life insurance policy for a child can be seen as a good thing.
First as we grow older we may face various illnesses or accidents, and this is even more so with children. A child may experience a life threatening illness or event that may cause them to be uninsurable later in life. If a policy is in place from a your age they are already insured and do not have the worries of if they can obtain a life insurance policy or not.
Secondly, if a cash value policy is taken out, these in some instances can be used to continue the policy after a period of time by paying the premiums out of any dividends or cash value. So as a parent you pay into the policy for a period of time and then the policy perpetuates itself; it pays its own way.
It is debatable as to if children require life insurance or not, as in most instances life insurance is there to protect an asset and only there for the surviving beneficiaries. However as you can see, protecting your children’s future in that they will always have a policy in place no matter if they face illness or serious injury which may impact their insurability in the future is an asset.