Life insurance for children makes sense | Business

Life insurance is not typically a parents’ first thought when it comes to insuring their children, especially because the children have their whole lives ahead.

Collin Doyle, an insurance agent with State Farm in Mayfield Village, and Nancy Schoop, claims manager, and Rob Strachan, account manager at Strachan-Novak Insurance Services in Twinsburg, all said that parents could never be too careful.

“Tragedies can happen anytime,” Schoop said. “Whether it’s accidental or sickness, you’re still going to have final expenses. You can lock in really low rates that children can carry with them until they are older. It’s something I did not do for my two sons and I truly wish I had. The sooner you can buy it, you should.”

Schoop said parents don’t like to consider the possibility of something happening to a child, but purchasing life insurance while young has benefits. She said other family members could purchase life insurance for a child as a gift.

Strachan said life insurance could turn out to be a more meaningful gift than another toy.

“I have young kids and for many other parents, you get so many plastic toys,” he said. “We received a gift from the grandparents and it was a whole life policy. It’s a lot better than receiving something plastic that they are going to only play with a couple times.”

Schoop said she thinks all parents should at least consider buying child life insurance, she knows many families with young children tend to have strapped budgets.

“We as a society have spent a lot of money on what we pay for coffees or cell phones, and with that, you could have a life insurance policy for your child,” she said. “A lot of people in their minds don’t want to think or talk about something happening to their child. (Life insurance) is probably one of the best things you can do for your child.”

Strachan said there are two main reasons parents should consider life insurance for a child – funeral expenses and that life insurance locks in insurability for life at a low rate.

“There are people who say they could save the money and put it into an emergency fund, but you can’t guarantee insurability when (a child) is a young adult,” he said. “You can also bundle these plans with home and auto to save more money.”

Doyle said another benefit of purchasing a policy when a child is younger is its ability to grow in value over a longer period of time.

“Purchasing an individual policy for your kids protects their future insurability and, depending on the type of policy purchased, may build cash value insure the policy,” he said. “There are certain policies that are popular with parents where they can pay for 10, 15 and 20 years and the policy will be fully paid up.

“This is a policy that the child can have and keep forever and has already been paid for. There are also endorsements that can be placed on these policies where the child can add certain amounts of life insurance as they get in their late teens, twenties and thirties.”

Doyle said when it comes to insuring family members, parents should be considered key and first priority, so the children will be financially prepared if something were to happen. But, if the family budget allows, parents should explore adding life insurance policies for their children.

Doyle, Strachan and Schoop all said parents should consult their insurance agents before committing to anything.

“I recommend talking with an insurance professional to decide which options make the most sense,” Doyle said. “Life insurance is not a one size fits all, it takes a lot of questions and answers to determine what the best solution is for each client and well as determining if it fits within the budget.”

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