Congratulations, you and your wife have just had your first child. It's time to whip out that checklist of to-do items you made in preparation of this little miracle.
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- Put together crib - check
- Schedule the baptism - check
- Replace carpeting with easy-to-clean linoleum with a faux hard-wood finish - check
- Read "Raising Kids for Dummies" - check
- Buy life insurance for your baby - what?
Yes, the thought of buying child life insurance doesn't seem all that logical. Your baby or young child presumably has a lot of years left. If you want to protect your family, you should seemingly buy life insurance for yourself or the person earning the most in your family. Why buy life insurance for a kid?
Juvenile Life Insurance Has Many Uses
Juvenile live insurance has many uses other than insuring against a child's death. A life insurance policy has a cash value that can be used for anything, such as paying for college, buying a car, putting a down payment on a house, etc.
Life insurance can earn interest and act as a tax shelter. Parents often give life insurance policies to their children as prudent monetary gifts. Under current tax law, the cash values that accumulate within life insurance policies are tax deferred. With some policies, even borrowed cash values are protected from taxes.
Juvenile Insurance Generally Means Cheap Insurance
By now, you all know that I'm always on the search for cheap insurance. Last week I wrote about how those who smoke will generally pay a higher premium for life insurance.
Although I was able to find some relatively inexpensive smokers' insurance, I was amazed at the deals I found for juvenile insurance. This makes sense, because it's pretty hard to find a healthier segment of the population than children. If you buy life insurance for your child, you can often lock them into a very low monthly premium for the rest of their lives.
Although purchasing life insurance for your child may not have been on the priority list this holiday season, it is a prudent investment, relatively inexpensive, and a gift that will last a long time.
About the Author
Kirk Bangstad is an artist, manager, and singer working in Chicago, IL. His previous experience includes consulting for technology companies in the Silicon Valley and serving as a field director and publicist for a statewide political campaign. Kirk holds a B.A. in government from Harvard University.
