Many parents wonder if they need to have life insurance for their children. This can be a difficult decision. No one wants to think about their children dying, but it does happen occasionally. There are benefits for carrying a life insurance policy on your child. Here are five reasons you may want to consider it.
Cover Funeral Expenses
Funerals are expensive, and if you are not saving for it, you may struggle to pay for the cost of the funeral. According to the NFDA, the average cost of a funeral is $7,181. If your little one passes away, you do not want to be worried about paying off the funeral in the future. A small life insurance policy would not cost very much and could take the stress of paying for a funeral away from you and your family.
Cover Medical Bills
Terminal illnesses or even a sudden unexpected illness can cost hundreds of thousands in medical bills, and you may still owe a great deal even after health insurance picks up a good majority of the expenses. Life insurance can help you pay off the medical debt, so that you do not need to continue paying on it while you are grieving the loss of your child.
Provide Insurance Policy into Adulthood
If you purchase a whole life policy for your children, they can continue to pay for that policy into adulthood. This will provide them with life insurance as they go to college and have a family of their own. If they develop a condition like diabetes or cancer that makes it much more expensive to purchase life insurance, they can still continue to carry this policy at the rate that you locked in over the years. This can be a great benefit for them.
A whole life insurance policy allows the holder to cash out the policy if needed. Many parents will purchase a whole life insurance policy and then have their children cash it out when they reach college age to help fund a portion of their college education. This allows you to use the life insurance policy to plan for your child's future. This is not an option if you purchase term life insurance.
Set Up a Memorial Fund
If your child does end up passing away, and you do not need all of the money to cover funeral and medical expenses, you can set up a memorial fund for your child. You can use the money to give scholarships to other children in the community or you can donate some of the money to research cures for cancer. It is good to have the option to try to help someone else after suffering a huge loss.
For more information about life insurance, visit Matt Roenker Insurance Agency.