Why I Bought Life Insurance For My Child
When people talk about child birth, they call it the miracle of life. You know, I never really got that saying. I always took a more realistic and pragmatic approach to it. It is just biology after all, so what on earth are they harping on about? All that changed when my wife and I had our first and as yet only child, about 3 years ago. Once I held that little bundle of flesh in my arms for the first time though, it all made sense to me. Knowing that this little guy is my kid, and I’m responsible for creating him put things in perspective for me. One of the most amazing feelings in the world is cradling that little thing in your hand for the first time. It’s indescribable! And you won’t ever really get the depth of emotion you feel at the bottom of your heart, until you yourself have experienced it.
One of the overriding emotions then was a sense of responsibility, and just a teeny bit of fear. After all, being accountable for the future, the character and the very nature of your child is in your hands, and that is a big, big charge. You want your child to grow up into a wonderful human being, but wanting something and knowing how to achieve it are poles apart. One thing I was certain of was that I was buying my child a life insurance policy.
The reasons that led me to buying my child an insurance policy
The receipt of benefits in case he passes. As morbid as it seems to consider, we know from experience that life is the most unpredictable thing. Like a withering candle, one swift breeze can snuff it out, and as such we have to be prepared. I’ve heard all the arguments about life insurance being only for earning members of the family, but people seem to forget that you do receive some money for funeral and memorial related expenses, and also get reimbursed for any medical bills that your child doesn’t qualify for according to health insurance policy terms. While this might not seem like such a big deal, knowing how attached I got to him from the moment I set my eyes on him, I know I’ll be heartbroken in case the inevitable does happen, and I won’t be in any frame of mind to worry about whether or not I have enough money for a funeral and a service, or where it’ll come from.
Value accrued. Universal policies or whole life policies accumulate a certain cash value over the years. This revenue as it were, is tax free, and can build the foundations for your child in the future, be it for education, a new car, or even the down payment on his own home! While the amount may not be very substantial you know at least that there’s some amount in place, and can take it from there. Furthermore, unlike saving in a normal bank account, there’s less temptation to dip into this saving in case your own financial situation becomes tighter. The fact that you’re paying a steady premium also means that you don’t have to remember to set money aside over a certain period, the process is more automatic, and I for one will be thankful for that.
Guaranteed Insurance in the future. Sometimes, due to a sudden onset of a serious ailment, or even the gradual development of a lifelong one, can cause insurers some trepidation with regards to the issuing of a life insurance, even outright to refusal in extreme cases. But depending on the term of the insurance you get for your child, it can have a rider against just such a thing. In that case, no matter how bad his health gets, as long as we don’t default on our payments for this particular policy, the insurer will be forced to offer him some insurance. This is especially important in my case, because the wife’s side of the family has had a certain history with cancer. Byron Udell says, “For those families that have a history of health conditions that run in the family, this is reason enough to try and seek life insurance protection on your child.”
Borrowings. This insurance policy can also be used by my son to take out loans against in the future. Again, these loans would be tax free, and can help give the kid a leg up in case he needs the capital to invest in his personal life, or kick off a business or anything else he might require. Instead of a crippling loan with exorbitant interest rates and a tax cut, he can now get a better deal on the loan thanks to his life insurance, which will help him pay it off quicker, and accrue a relatively smaller debt value.
There you have it then, that has been my reasoning for taking this step, and I don’t regret it one jot. If you have had the same misgivings that I mentioned above, you too can get an insurance policy like this. Most big insurers offer it, and you can even contrast and compare the offers available online through aggregator websites and get the cheapest possible rate, saving even more money in the bargain.
