Why Should I Buy Child Life Insurance

Why Should I Buy a Child Life Insurance Policy?

A question that many parents ask is, “should I buy a child life insurance policy?” Many people think that it’s not necessary because of two things. One, there is a misconception that a funeral for a child is not very expensive. However, that is not true. Final expenses can add up, even for children. Two, life insurance policies for children seem to contradict the reason for buying life insurance in the first place: income replacement. Adults purchase life insurance to replace the income that will be lost if a breadwinner in the household dies. Children don’t bring in any income, so why purchase life insurance? Here are some things to consider when wondering if you should buy a child life insurance policy.

Final Expenses

As mentioned above, final expenses for even a child can add up. Caskets, flowers, funeral homes, grave plots, and more aren’t cheap. Even something relatively small, such as a $5,000 or $10,000 term life policy on your child can go a long way toward paying for the necessary elements of a burial. Losing a child is the most traumatic experience someone can go through, and not having to worry about how to pay for a funeral is a good thing.

Time Off Of Work

In the event of losing a child, I cannot imagine going back to work after a couple of days. People typically take several weeks off of work to cope with the loss, seek counseling, etc., and in a lot of cases, this time off of work is uncompensated. Having a life insurance policy for your child can help cover the income that will be lost from not going to work.




Counseling

As mentioned above, counseling is a cost that must be considered when a child dies. But counseling isn’t cheap. Having a life insurance policy on your children can provide money that can help pay for therapy sessions. You may have a good health insurance policy that pays for mental health benefits, but how far will those extend, and what is your copay or deductible? Is it affordable? Life insurance will help cover those costs.

Future Insurability

A difficulty with obtaining life insurance is health status. If you have health problems you could be either limited on the amount of life insurance you can buy, or you might be denied insurance and have no coverage. However, many times if you purchase insurance while you are healthy you can keep the insurance when you get sick. For children, this is especially important, because most kids are healthy. So if you purchase a policy now in their younger years, they can renew as they get older not matter their health status.

Conversion

What is life insurance conversion? Life insurance conversion is the ability to change a policy if circumstances change. If someone has a term life insurance policy that is about to expire and it has a conversion provision, that person can convert that term life policy to a policy type that is more permanent. A policy can also be converted if term insurance through an employer ends through employment termination. For kids, conversion is an important thing to consider because the policy can stay in place even as circumstances change when they get older.

Where to Purchase Child Life Insurance

Perhaps the easiest place to purchase life insurance for children is through work. If your employer offers a child life policy that you can buy, the price will be affordable, and the policy will typically offer at least enough insurance for final expenses.

You can also buy child life insurance through private insurers, either in person or online. You can easily get quotes and sign up for policies that will keep your child covered with life insurance.

When you find yourself asking, “should I buy a child life insurance policy,” keep in mind that the cost is usually small, and you will be able to be financially stable while you are going through a difficult time.

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Options of Health Insurance for Children of Young People

Your kids are the most precious thing in your life, and when it comes to covering their medical needs you want the best health insurance for children that you can find.  But when you are young yourself, chances are that finding affordable coverage can be tricky.  Selecting an insurance plan is hard enough to begin with, and with the added pressure of getting your kids covered, you want to make sure you make a good decision.  Fortunately, there are some good options available that will give you comprehensive coverage at a reasonable, and sometimes free, price.

Children Can Be Covered No Matter Their Medical History

The Patient Protection and Affordable Care Act (PPACA), or Obamacare as it is known by many, eliminated the pre-existing condition exclusion for children (and adults beginning in 2014).  This means that an insurance company cannot deny health insurance for children with expensive medical histories.

Don’t Ignore Your Employer’s Health Plan

A group insurance plan allows every employee with the company to purchase health insurance at the same price.  Employers will typically subsidize the cost of the health insurance premium.  So if you are offered medical insurance at work, make sure to check the cost of the family or employee + child insurance tier.  It could be cheaper than buying it on your own through the individual market or the health insurance exchanges.

Individual Health Insurance Plans

If you are not able to buy insurance at work, or you think the price is too high, you can go look for health insurance on your own through the individual market.  You can independently search on your own, use a broker, or visit a website that will help you find plans and premiums that fit your medical and financial needs.  Insurance companies such as Blue Cross Blue Shield, Aetna, Cigna, United Healthcare, etc. have many options for health insurance for children.

Health Insurance Exchanges

PPACA set up health insurance exchanges, which are online insurance marketplaces where people can easily compare plans and premiums from a variety of insurance companies.  In addition, when purchasing insurance through an exchange, you could qualify for a tax credit depending on your income.  Whether you are eligible for the subsidy or not, the exchanges are a great place to find health insurance for your kids.

The exchanges are run by the states, but if your state does not offer an exchange, you will buy through a federal marketplace.

Medicaid

If you are having trouble affording health insurance, you should check to see if you or your children are eligible for Medicaid.  Medicaid helps pay the cost of health care for children from low income families.  Eligibility is determined by each state, so check with your state’s Medicaid office to see if you can receive health insurance for children this way.

Children’s Health Insurance Plan (CHIP)

But what if your family makes just enough to squeak over the Medicaid threshold?  That’s where CHIP comes in.  CHIP is health insurance for children that come from families that make too much for Medicaid, but still have trouble affording medical insurance.  CHIP is run by the states and works in conjunction with Medicaid.  Visit your state’s CHIP website for more information.

As you can see, there are a variety of ways to keep your kids insured so that you can have assistance in paying for the cost of their healthcare needs.  Health insurance for children is vital to their growth and development, and when you look around you can find good plans at reasonable prices.

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