Why I Said “No” to Children’s Insurance

Photography from iStockphoto.com

A few months ago, a man in a sharp suit knocked on our door. Turns out he’s a financial advisor and plans to set up shop in our neighbourhood in a few months.

I noticed him eyeing my daughter’s wagon on our porch. He made some small talk about how many young families have moved into the neighbourhood. Then without skipping a beat, he proceeded to offer me children’s life insurance.

I listened to his spiel. While no one wants to imagine the death of a child, for only a few dollars a month, I can insure my daughter in case the unimaginable happens. Or have I considered the fact that my child may not be able to afford insurance they become an adult? Why not insure them now so they have some coverage for the future?

To his surprise, I politely declined.

Here’s why: Most financial experts will tell you the goal of life insurance is to protect your income in the event of death. Which is why insurance for parents makes sense. After all, our children rely on our income for keeping a roof over their heads, feeding them and paying for their countless activities. If something happens to us, insurance will help to continue to pay for those things.

We rely on our children’s income to… oh wait, they have no income. Or if they do, we certainly do not rely on it to support ourselves.

You might be thinking, what’s the harm of buying peace of mind for just a few dollars? Remember, a few dollars a month won’t buy you much coverage—definitely not enough insurance for your future adult child who may one day have a child relying on him.

Whatever you decide, it’s not a bad idea to seek a few other opinions from other sources first.

Deanne Gage has written about all matters financial since 1999. She writes, edits and strategizes out of her Toronto home that’s partially under construction. Besides money issues, she enjoys running fast, jazz music and drinking a quality glass of Merlot. Her two-year-old daughter is quite familiar with money: she borrows it from mom’s wallet for her toy cash register.







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