How to buy life insurance for kids

Life insurance is a wise investment. It is important that everyone in your family is covered in case a tragedy occurs. After reading my advice you may wish to buy life insurance for kids.

Difficulty: Easy

Instructions

1. Understanding common types of children's life insurance.
   
   There are two main types of life insurance: whole life insurance and term life insurance. The big difference between the two is that term life insurance only covers a set term and whole life insurance is generally kept for life. Another key difference is that whole life insurance builds a cash value while term life insurance does not. Whole life insurance is a great choice for life insurance for kids.

2. Determine how much life insurance for kids you need:
   
   Make a list of your debts and financial obligations. Take the time to think realistically about what sort of debts would be incurred with the loss of a family member.

3. Shop around:
   
   You can get free life insurance quotes online or over the phone. Shop around for the best rates.

4. Compare policies:
   
   Some cash value policies will eventually double the coverage when a child turns a certain age. This could be valuable if your child decides to keep the coverage as an adult. If your child decides to cash out his policy as an adult it may be a boost of money for college.

Tips & Warnings

• This is a topic we do not like to think about, but providing life insurance for children is very important.

[marna]

on 2/4/2009 Life insurance for children is anything but a wise investment. The purpose of buying term life insurance is to replace income that is lost as the result of a death. Most children are not bringing in money for their family. While there is cash value in whole life policies, the costs associated with whole life policies make this investment strategy quite undesirable. The insurance companies are clever at presenting whole life policies in a way that hides the reality of how much a person can earn. Don't do it. If you have the money to put toward a whole life policy, invest it on your own. You'll be much better off.

[Hadley]

on 1/27/2009 It's also important to review the financial strength rating of the insurance companies you consider. Because you want to make sure your family gets paid if something happens.

[StarrySkye]

on 12/3/2008 Great article...important info...thanks for sharing!

[cadence]

on 12/3/2008 Great info - I never thought about getting life insurance for kids.