Life insurance question/opinion -I'm curious if you would validate or disagree with my thoughts on life insurance for children.
Background:
1) the insurance industry would have everyone buy a 20 pay whole life on children as a gift.
2) consumer advocates seem to tell people that children don't earn an income, so therefore don't insure.
I think they're both wrong. My thoughts have changed over time, based on empirical evidence. Every time I've seen a children pass prior to the parents, it's a sledgehammer to their lives. And that means they are off work for an extended period of time (6 months say) or longer. I've seen parents never return to work. So there's emotional stress, and financial stresses at that time.
I now suggest that parents insure their kids with $100,000 of 20 term insurance. The cost is relatively inconsequential. It covers the small financial catastrophy upon the death of a child due to loss of income on the parents' part. And incidentally, the conversion option on term insurance allows the option of future insurability if and when it's needed (and no explicit cost if it's not).
That's counter to pretty much everything I hear in the industry or from those outside the industry. What are your thoughts on this approach?
lifeinsurancecanada1 karma
Life insurance question/opinion -I'm curious if you would validate or disagree with my thoughts on life insurance for children.
Background:
1) the insurance industry would have everyone buy a 20 pay whole life on children as a gift.
2) consumer advocates seem to tell people that children don't earn an income, so therefore don't insure.
I think they're both wrong. My thoughts have changed over time, based on empirical evidence. Every time I've seen a children pass prior to the parents, it's a sledgehammer to their lives. And that means they are off work for an extended period of time (6 months say) or longer. I've seen parents never return to work. So there's emotional stress, and financial stresses at that time.
I now suggest that parents insure their kids with $100,000 of 20 term insurance. The cost is relatively inconsequential. It covers the small financial catastrophy upon the death of a child due to loss of income on the parents' part. And incidentally, the conversion option on term insurance allows the option of future insurability if and when it's needed (and no explicit cost if it's not).
That's counter to pretty much everything I hear in the industry or from those outside the industry. What are your thoughts on this approach?
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