Insuring your new arrival

A birth necessitates additional insurance. But for the most part this insurance is not to provide coverage on the baby, but to provide for the new-born in the event that something happens to the parents. The one type of coverage that every child does need is health insurance. Children are prone to accidents and frequently catch a variety of serious and minor illnesses. As a child will assuredly become sick, having health insurance is mandatory. But beyond health insurance, children themselves need little insurance coverage.

Parents are often bombarded with sales pitches to buy life insurance for their kids. However, life insurance is primarily intended to cover a personís dependents. As children do not have dependents there is little reason to buy life insurance for a youngster. Though a life insurance payout could cover the cost of a childís funeral expenses, the chance of a child dying is statistically extremely small. Furthermore, it is a better use of a parentís money to buy health insurance and provide the child with a healthy upbringing than to spend money on life insurance that there is almost zero chance of being used.

However, while there is little purpose in buying life insurance for a child, the parents do need to buy life insurance for themselves. The purpose of parental life insurance is to provide care for the child in the event that a parent dies. While there is a small likelihood that a healthy parent will die, the death would be financially devastating to youngsters who would be unable to provide for themselves. While every situation is different, a common guideline is that a person should have about eight times their annual income in life insurance.

In addition to life insurance, parents should also consider buying disability insurance. Though the chances are again relatively small, a person is much more likely to become disabled than to die. However, this disability would still have a significant impact on the child as most employer provided disability insurance and government sponsored plans provide only a minimal amount of coverage. While many people worry about the cost of disability insurance, the cost of coverage is surprisingly affordable for young and middle aged adults in good health.

Though there is always a lot of financial pressure on parents, there is no better use of a parentís money than to care for his or her offspring. Spending money wisely to buy the right types in insurance can provide peace of mind from knowing that the family will be taken care of in the event of a parentís death or injury.



Please be aware that the articles on this site are written by mothers who are discussing their own experiences and their own opinions. They do not, and are not meant to, represent professional advice and should be read with that point firmly in mind. Our childrenís welfare is paramount; if you are ever in the slightest doubt about any aspect of caring for a child you are urged to seek qualified, specialist advice from a professional advisor.

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