Reader’s Question:

My husband wants to get our 10-year old daughter a life insurance policy. Is a life insurance policy for a kid necessary?

Sidney

Denver, CO

This is a good question. Unless your 10-year old daughter is the bread-winner of the family, there really isn’t any compelling reason for you (or your husband for that matter) to purchase life insurance coverage on your daughter. The main purpose of life insurance is to replace “lost income” and avoid the dependents/beneficiaries from incurring financial hardship should the insured individual (the breadwinner of the household) suddenly dies.

One valid reason to get life insurance for children is to make sure that they can still get life insurance by the time they turn to adults. Rates will be far cheaper and they are assured coverage even if they develop certain illnesses or conditions that would otherwise make them uninsurable had they not been insured as a child.

In the end it’s still your money and rarely would any life insurer turn away a potential policyholder. However, do prioritize the main income earner first. If you’re budget is tight, reconsider purchasing life insurance for your daughter altogether. You probably can find better ways to invest that money for your child (like on a college education plan). But if you’re husband is headstrong into this, at least do your best to shop around for the best-priced rates. Use life insurance portals like this website to run free rate quotes and be able to compare deals coming from many different life insurers quickly and easily.