Is it important to buy life insurance on my child's life?

Many people buy life insurance on anyone's life is in order to reimburse expenses caused by the death of the insured person or to replace the "lost" of income. In case your child passes away, you do not lose income, but there will be expenditures on funeral, burial and other expenditures that could be thousands of dollars. The lost of this sum of money may cause financial difficulties to the parents of the departed child.

There is another reason for buying life insurance on a child's life. It may be necessary to guard against the case that the child might not be able to buy life insurance when he/she gets older due to an illness or different circumstances.

One more reason for purchasing life insurance on a child's life is to teach the child financial responsibility. Usually the insurance is whole life insurance, the ownership of which is transmitted to the child when he or she is 21.

However, before thinking of insurance on children's lives, it is advisable to spend your insurance budget to purchase life and disability income insurance on the parents. If a parent, an income-earner, dies, this can lead to financial consequences that are devastating.

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