Today’s Question: Does Children’s Life Insurance Make Sense?
Today’s Question: Does children’s life insurance make sense?
The short answer is, yes, it makes sense. I have three children and I have purchased a policy on each of them. My father also bought a policy for myself as well as my two brothers when we were younger. A big advantage to the policies that he purchased on us is that they were with Manulife at the time, which when the company demutualized, we qualified for a demutualization benefit; but that is a topic for another day.
Back to children’s life insurance. I do think it makes sense, mainly for those who have their financial house in order, they’re maximizing their RRSPs (Registered Retirement Savings Plan), TSFAs (Tax-Free Savings Account), and their RESPs (Registered Education Savings Plan), and also have their mortgage under control; potentially taking advantage of pre-payment options.
For those individuals, life insurance on a child can make a lot of sense because it is another asset that can give a child a head start. This head start can aid them, especially if their health changes down the road. They have a base policy in place and that base policy may even allow them to upgrade their coverage in the future if they wish to do so.
Have more life insurance questions? We have more answers for you here!