Babies. Super cute, aren’t they? Babies light up our lives with their antics and adorable faces. You know what they are not so good at? Earning an income. So why would you insure a baby?
Insure a Baby? The Big Debate
There are two schools of thought when it comes to insuring babies. One camp says, “You only insure the income earners in the household.” The other camp says, “There are many different kinds of life insurance and not all are tied to income protection.”
I’m in the second camp.
College, Weddings, First Cars, and Down Payments on Homes are Expensive (and so is Life in General)
Babies come with a lot of needs, such as the need to be clothed, fed, and sent to college. Later the little tyke is going to want to buy a car, get married, own a home, and travel – possibly all in one year!
The bank of mom and dad can only support some of those things in the here and now. Putting aside cash for the future can be difficult for your own needs, let alone that of your child.
Hence, whole or universal life insurance, aka permanent insurance.
Permanent insurance has a cash savings component that accumulates over time. Even better, permanent insurance has the benefit of being, well, permanent.
The Benefit of Permanent Insurance
The best time to get insurance is when you are young and healthy, and what is younger and healthier than a baby? The younger you are, the cheaper the premium. Babies and young children can get very cheap life insurance premiums and that can be the premium for the rest of their life. You can even assign the policy to them when they are of age.
Think about that. Suppose the child grows up and develops a health condition that makes getting insurance expensive, or has trouble affording insurance when he or she is on their own. Thanks to you insuring your baby, it can be a non-issue. They have insurance. The premiums are super cheap for life, AND they are accumulating cash savings that can be leveraged.
Speaking of Health Conditions…
Critical illness insurance is a living benefit that pays the life insured cash when diagnosed with an illness named in the policy. That means, cash to help with medication, out of province treatment, pay off bills, take time off work – the money is yours to use however you wish.
Critical illness insurance can be added as a rider on a permanent insurance policy or be taken as a standalone policy.
Is here a history of serious disease in your family? Even more reason to add critical illness when insuring your baby.
Insuring a Baby – Why I Like It
Insuring a baby, child, or young adult with a permanent policy that has a critical illness insurance rider gives the child lifelong insurance protection, accumulates cash savings, and provides cash to help the them later in life should he or she develop a serious illness.