Should I Buy Baby Life Insurance?
Should I Buy Baby Life Insurance?
There has been a lot of controversy on the subject of baby life insurance. Whether it is a worthwhile product or not depends on how you view it. Some financial advisers will advice against it while there are those parents who believe whole heartedly it is something that you should do as responsible care givers of your little one. And it is heart breaking to mention, but there are also those who have suffered the death of a small kid and hence appreciate life insurance for their baby. Such parents consider this as a viable method of taking care of their child’s monetary interests and health. Below are some of the facts about baby life insurance and the differing views.
1. Parents Appreciation for Baby Life Insurance
It is only natural for parents to have some protective instincts towards their kids, and that starts with lots of planning well before their baby is even born. Most parents are willing to go any length to ensure that their child has a safe and secure life. A large percentage of such parents will insist on having baby life insurance. This is not at all because they think their child will die, but rather because they view it as a proper avenue of taking care of their precious baby and his or her future. Baby life insurance policies are usually very affordable which makes them common among parents. Parents purchase the policy with the hope that the cash will accumulate to some substantial amount in the near future especially by the time the child is ready for college. Such funds can later be used to help with buying a car, college fees, etc. However, many financial experts advise that if the baby life insurance is invested in other avenues it would yield much higher returns. Most of the parents look many years in the future while they purchase baby life insurance. They see it as them making a purchase early so that their baby will be insured for life. They assume that the insurer will not ask the child to take a medical test later in life since the policy was acquired when he or she was young. Usually such parents are broad thinkers and see the big picture or they have friends who suggest it or connections themselves with insurance. These parents feel that baby life insurance is vital because if their child is not insured and develops a medical problem, it will be very difficult and expensive for him or her to get insurance at that point.
2. The Opinion of Opposing Financial Advisers
Many financial advisers will discourage people from purchasing a baby life insurance policy. This can be due to the factors mentioned below:
- Financial advisers argue that insurance for a young adult who has a medical complication is still possible and therefore there is no need for the baby life insurance policy.
- They believe that this product is not beneficial because it has a face value of between $5 and $10,000 which is very high and more like a scam.
- They consider the policy as being illogical when categorized as a life insurance product. The main aim of a life insurance product should be to protect the family’s main bread winner. They do not see the long-term value in it.
- The financial advisers also argue that the whole life part of the policy is not a true whole life investment. Because in this type of insurance, the policy holder is allowed to make withdrawals of some of the investment at various time periods.
3. It's of Course Your Decision
The differences in the approach of parents and many financial advisers to the idea of taking a baby life insurance are pretty simple to comprehend. Financial advisers are experts who analyze the whole idea broadly and without emotion. These experts analyze critically the impact of every decision and investment. On the other hand, the parents usually focus on the positive aspects of the insurance policy for their baby’s future. This is because parents will do everything in their power to ensure that they give the best to their kids-even if that involves some risk. The decision about whether to purchase baby life insurance for your child should be considered keenly. Similar for instance to buying a car seat for your baby, you should analyze all aspects of the purchase for the long and short term. Like purchasing a car seat, piece of nursery furniture or any other large product that affects their baby, parents must weigh the investment and returns to determine if it is worth it. Ask your insurance provider to give you details on the costs, charges and any other fees. Investment decisions should always be handled with much thought and care. If you need additional advice, seek the services of a financial advisor who is well equipped with detailed information and research of the subject. They will-with an unbiased option-show you both sides of the coin, and the choice of course will ultimately be completely yours.
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