Insurance for children are cheap, sure but in this case, “cheap” doesn’t equate to “good buy.”
The reason is simple. Children don’t need insurance. Our personal finance feature for today says:
Children do not need life insurance. You are not dependent on your child for your income. If your child passes away, you can still continue to work and earn, and life will still go on for you.
Read the entire article here.
Use that extra cash instead to increase your coverage. What’s important is for PARENTS to get the right coverage. I daresay most Filipinos are underinsured.
We get a little bit of comfort in that insurance policy tucked inside our filing system at home. (Hmm. Wait. Where is that policy? Our loved ones should know where it is kept or better yet should have a certified true copy.) But insurance coverage should be revisited from time to time especially upon the birth of a new child.
Next question would be: how much insurance do you need?
There are many rules of thumb, some of which are, to me, extremely ridiculous, like the one that says it should be enough to pay out up to 10 years worth of your income. You’d be living like the dead now to pay your insurance company so that your beneficiaries can live like royalty when you die.
I like Noet’s way – computing backwards. Find out how much spouse and kids need to bury me (ouch) and sustain a comfortable lifestyle for two to three years. Since he’s the one that pays for our every whim, the pressure to get a high coverage is not really that big. Hehe.
Still, even housewives need to buy insurance because childcare and homecare is costly. But buying insurance for kids? No thanks.
October 17th, 2007 at 8:01 am
It can economically help provide a firm foundation for a child’s financial future.By insuring children in the prime of health,you’re assuring them protection w/c they might not be able to buy at a later age due to illness or injury.The earlier you start a child’s life insurance plan, the lower the premium and the greater the policy’s cash value w/c may be borrowed to help w/ temporary needs or emergencies.So, May did the right thing, your kids will thank you for that,like how you thank your parents about your policy.
October 16th, 2007 at 11:57 pm
My mom gave me a life insurance when I was young and now that I am independent and with a family I continue to pay for the insurance and changed the beneficiary from my mom to my husband. I felt that she planned my financial future well because now I dont have to worry about starting a more expensive life insurance to protect my family. Because of this experience, I bought life insurance for my kids and they can decide what they want to do with their policies when they grow old. Is my line of reasoning correct somehow or not? Please advise.
Thank you
October 16th, 2007 at 9:34 pm
[...] Salve Duplito blogs about insurance for kids in Money [...]
October 16th, 2007 at 5:33 pm
nothing really wrong with buying an education plan that also insures your child. just know that the value is from the living benefits and not the death benefits.
October 16th, 2007 at 1:44 pm
so what do you suggest? what are the alternatives. I bought a pension plan type insurance and education plan. can you provide alternatives