Insurance for children is not something that is taken very seriously and this is because the threat and risk involved is minimal
. It is often thought of as an after-thought or an add-on investment by most adults. So the bone of contention here is, do children need to be insured or is it something one can do without? Basically the idea of life insurance is to compensate for the financial losses upon the death of a person. Considering that children do not contribute to the household finances and do not have earnings of their own, the idea of insurance does not arise.
Children do not have dependents anyway, and rational thinking says, this makes the whole idea of investing in life insurance a whim or fancy of the parents. This is almost always true except in rare cases where the child does earn as a model or an actor. These kids have significant earnings of their own and hence can be eligible under the Child Life insurance plans. Most people do not face this dilemma as the chances of a kid modeling are quite rare. Is that to say that one does not need to invest in Child Life insurance?
However, people who actually go for Child Life insurance treat it as an endowment to their kid. The life insurance plan earns them a certain amount of interest every year during the growing up years of the child and the plan itself can be continued by the child after he/she becomes an adult. It is quite a popular idea amongst parents as they see it as a win-win situation. They earn interest which can again be re-invested and their child has a life insurance ready and already half paid for.
Most financial and insurance experts however, feel that Child Life insurance is something one can do without. The money that one wishes to invest in the insurance plan for their kid would be better utilized if it were to be used in some kind of a savings plan or in the form of a college fund. There are various such investment plans and schemes available which would guarantee that your kids college tuition is all paid for. This secures their future and is in an insurance against a life without education. Since the most common reason for dropping out of college is the lack of funds, you might want to take this seriously and start a college fund for your children right away.