Reader’s Question:

Do you think it would be a good idea to get my children a life insurance policy here in Colorado as early as now?

Hudson

Boulder, CO

Very interesting question. For the longest time life insurance experts (both real and self-proclaimed) have been giving mixed messages with regards to acquiring life insurance policies for children. There are those who say that one will just waste money on policies that would have very minimal value over the long term. That parent’s are better off investing on trust funds or mutual funds for their children’s future.

There are those who says that life insurance this early would be a great way of preparing for the child’s future, since premiums can be kept significantly low even by the time they become adults and may come in handy in case they become un-insurable or prohibitively expensive to insure in the future due to acquiring a disease or extremely bad habits. Life insurance can even be a form of investment where they can get money for future needs.

While still others say that the purpose of life insurance is to protect the primary-income earners of the household or family and that it is a way of providing financial support in the event the primary income-earners suddenly dies. Kid’s are not really income earners, (with exceptions to child-stars and child laborers of course) so life insurance doesn’t apply, so what’s the deal?

I say it’s matter of personal and financial opinion. All sides can make a fine argument and would all probably be valid so base your decision on your children’s future needs there in Colorado.