Who doesn’t need life insurance for their child?
At the end of the day, buying insurance is a personal choice. But keep in mind that unexpected funeral costs, as well as lost income from a leave of absence that allows you time to grieve, can be covered for as little as $3 per month.
However, Marr adds, don’t overspend to accommodate life insurance for your child. He suggests budgeting for your own coverage first—as well as paying off credit cards and lines of credit—before taking on this extra expense. “Have your financial house in good order, and then you can start paying for life insurance for your child.”
The pros and cons of life insurance for kids–and the costs, too
Not sure about what’s out there for your children? Here’s a quick rundown of the more popular insurance policies and prices for children.
Average premium: As low as $3 per month.
Need to know: There are two options: a child term rider (CTR), which is an add-on to your equally affordable term policy (meaning you’ll have to be insured first); and standalone term coverage, which is the child’s own policy.
Pro: This is the most cost-effective way to get started, and many policies cover multiple children at once for a low premium.
Con: Its value is limited, generally capping at around $35,000 per child.
Insurance shopping tip: Look in to a convertible option, which transitions when your child is an adult into a more valuable permanent policy—without a medical exam required. For example, you could pay $2.50 a month for $10,000 of coverage and, when you child is age 25, that coverage can be converted to $250,000 as standalone insurance.