Child life insurance provides coverage in the event of something that no parent should ever have to face - a death of their child. Thankfully, the odds of it happening are fairly low, especially in developed countries. But if a child is suffering from persistently life-threatening health issues or deals with debilitating disabilities, parents may want to consider child life insurance. Hopefully, it will go unused. Owning a child life insurance has a number of advantages, the trick is figuring out whether those advantages outweigh the disadvantages.
Advantages of Child Life Insurance
The biggest advantage of having child life insurance is the fact that it can help the parents pay medical bills and funeral expenses. Long-term medical expenses can run up quite high. Depending on the condition, this may include the cost of treatment, costs of hospital stay, the cost of buying specialized equipment, drug costs, transportation costs, etc. Parents may need to take time off work, which may cut into their ability to earn income. Funeral expenses can also be costly. Depending on the location of the burial and the way in which the child is buried, they can run up to thousands of dollars. Separately, the costs may not be that much, but together, the costs add up quickly.
Another advantage worth considering is the fact that many insurance companies would be willing to convert child life insurance into adult life insurance once the child reaches the age of 18 or 21. This can save money and ensure approval for the child later in their life.
Disadvantages of Child Life Insurance
While child life insurance has some advantages, it also has several significant disadvantages. First and foremost, while child life insurance has lower premiums compared to ordinary life insurance, it can still place a significant financial burden on the family. This is especially true if the family is young. Young parents have less time and less opportunity to save money than older parents.
Second of all, there is a question of necessity. As mentioned before, most children probably won't need child life insurance. That is true even with children who are suffering from cancer and/or HIV. Their health may suffer, but every year, there is a greater chance that they will be successfully treated, or, failing that, that they will be able to live into adulthood while the treatments continue. Furthermore, the parents may be able to shoulder then necessary expenses on their own, making the expense unnecessary.
Finally, if parents decide to apply for a child health insurance, their child would need to meet the insurance requirements. The unfortunate truth of the matter is that many insurance companies would not cover children with significant health issues at the time of the application. This means that, ironically enough, the more likely the child is to die, the less likely it is that he or she would be able to qualify for child life insurance. Parents who are considering life insurance have to be able to anticipate any potential health problems ahead of time.