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What kind of life insurance should we buy for our kids?

We have had a policy on our 17 year old for years, pay about $15 a quarter for it and I think it is some kind of hybrid between term and whole life. We have neglected to buy policies for our sons, 9 and 12 except for the coverage provided as a benefit from my husband's employer;. A nice lady at church put together policies for our boys and they are whole life for $212 a year, or about $20 a month! After our daughter's policy, I had not planned to incur a $40 per month expense. I want to preserve out boy's insurability. Can I do that with cheaper term?

Public Comments

1. It is a waste of money. If they are born healthy they will be insurable as adults. When they have a reason to get insurance like when they have children is the time for them to buy it. The nice lady at church is ripping you off.
2. This "nice lady" at church of all places is making a fortune off of you if you are interested. You need to insure yourself, not your kids. They are not the breadwinners of the family are they? You insure the breadwinner, so if that person dies, the rest of the family has money from a policy to continue a hopeful normal life. Also, a whole life policy is something you pay for your whole life, and it can cost 5-10 times as much as term per year for the same coverage. You are tossing away money so needlessly I am amazed.
3. Well, I fail to see the benefit of insuring our two sons, while my spouse and I do have personal term life insurance in addition to our employers term life insurance. The reasons we as parents have insurance is to ensure that the financial well being of family and children is maintained in case something happens to one spouse or both spouses. Insuring children do not provide such financial security other than, in my view, wasting money.
4. For kids, most parents would like to buy variable universal life insurance because it's often slightly cheaper than whole life and they can pay flexible premiums. Like typical whole life insurance, variable universal life has cash value in it and it is linked with market performance. With the economy rebounding from the bottom, I recommend you (if you can assume certain level of risks in the bond & equity market) to buy variable life insurance (which some of the contract fund will be put into a separate account for investment) because it is a great investment tool and some people use it for their kids' college education. You can overfund the policy yet WITHOUT making it MEC (modified endowment contract - which you will have to tax for capital gain) and withdraw money out of the policy as a stream of income after several years when it is paid up. Again, the policyholder has to assume investment risks, and most people bought this type of insurance and leave it for 5 to 10 years without changing their investment objectives. For instance, people who chose to invest in some kind of aggressive growth fund before the recession might have suffer about 50% loss if they did not move their money from the stock fund to bond fund. This is something they should have paid attention to.
5. Why do you want coverage for your kids? RUN THE NUMBERS. If you invested $20 a month, you'll do much, much, much better in the long run. Term, you can buy with a guaranteed renewable and convertable rider, if you want, and it WILL be cheaper for the first 20 years. And probably the second 20 years, as well - but by the third 20 years, whole life will be cheaper. Of course, if you'd put all that premium in an investment account in their name, they'd be millionaires by then, and not NEED life insurance.
6. I, as a professional insurance agent, would rather see you and your husband have enough life insurance on yourselves, and put the children on a Children's Term Rider on your policy. This would be for children under the age of 18. The rider would cover them until they are 25, and guarantee their insurability, that they could convert their coverage to a permanent plan, up to 5 times the original amount. Some insurance companies will go up to 10 times. Do yourselves a favor, and have a professional agent do a free Financial Need Analysis, (FNA) or other Total Need program, to help you and your husband determine, in your own minds, and according to your goals and objectives, how much life insurance the both of you should have, and what type; Permanent, Term, or a combination of the two. You would be under no obligation, but you will gain some knowledge on what life insurance is all about. But it would be nice to know whether you are adequately protected, wouldn't it? According to insurance industry studies, overall death claims paid by Term insurance are only about 1%. Some agents will recommend all Term insurance, without doing an FNA. Term is good, but it's not the answer to every life insurance need. The FNA will also determine if you need disability income protection to pay you an income, should you be hurt or sick and can't work. It will also help you determine if you need a tax shelter, such as an Individual retirement Account (IRA). According to statistics, disability is a greater risk than death prior to the age of 65.
7. Insuring them now it means it'll be MUCH cheaper for them to get life insurance later on so you should get insurance but not at that price, just search around, even ask the same carrier that already insures your 17 year old. I think Gerber should be good http://www.simplyinsurancequotes.com/gerber-child-insurance-quote.php?id=78
8. The "church lady" is ripping you off. Invest that money in a good savings account for IRA for education for the kids instead. And, do take a term life insurance policy for yourself and add the kids as a children's rider.
9. If you pay $15 a quarter for your 17 year old, why can't you buy the same for the other ones? Insuring them now will make it easier for them to buy insurance later on, it's a fact. Who cares if they are not the bread winner, save up the one restaurant bill once every six months and it'll cover it.