Is Baby Life Insurance Necessary?
In a word – NO.
In many more words, here's the problem with baby life insurance…
According to Smart Money and Consumer Reports life insurance for a newborn makes little to no financial sense unless your little one happens to be the sole bread winner in the family. Obviously this is rare unless your tot is big time Hollywood, so skip that insurance.
In the Smart Money piece, an actuary with the consumer advocacy group Consumer Federation of America, notes that baby life insurance is not only unnecessary but that, “It's never a good idea.“
Why you don't need baby life insurance:
The main reason you don't need baby insurance is because your money is more useful when spent in other ways. Better things to spend your cash on includes issues like a 401k, college funds, retirement funds, or even basics like groceries or savings.
Your insurance and your partner's insurance is far more important than baby insurance. Life insurance only does one thing, it protects and provides for those left behind when someone dies. As noted above, unless your child is making bank for the family somehow, you don't need the protection if your child dies.
Some parents think, “I should get that insurance, in case my child can't get any later” however, it's extremely rare that a young adult would be turned down for life insurance.
It is tempting…
When my son Cedar was about six years old he told me this; “For my own personal security and smart peas of mind (yes he did say peas) I should have life insurance…. and bonus, it will double by the time I'm 21! CAN we get some?!” Um… if the insurance companies can sell something as non-flashy, non-toy-like, and boring to a six year old, then places like Gerber Life are doing a kick butt job advertising this stuff, but honestly you really don't need to waste your money on it.
[image via stock.xchng]