What is the point of childrens life insurance?

-Seriously I want someone to tell me the real point of it.



If you support someone financially, a wife or child for example. Yes I can understand you having life insurance. Nearly all children do not fall into this category the exceptions being child actors for example... but seriously what purpose does life insurance for kids serve? Children are for the most part dependents and not providers and if one of your kids died in theory your bills would go down because less food, clothes, and toys need to be bought for said child.



Seriously, who buys such things? Moms like Casey Anthony perhaps?I'm not following the Casey Anthony trial, but...



You are correct, there is no need to have life insurance for a child unless they are some kind of SuperStar that is paying your bills. If you want to have a funeral fund, put the money you would spend on life insurance in a bank account and you will probably come out ahead.



In the words of Suze Orman, if you visualize yourself as someone who would not be able to function after the death of a child (can't work, etc) than you need life insurance on the child that will get you through this period when you don't have an income.



Additionally, if you have children and a non-incomer earning spouse dies there is usually some actual costs involved with this, such as increased day care, maybe cleaning services, change in eating habits, additional transportation needed, etc. So the non-income earning spouse should have life insurance to cover the increased costs of becoming a single parent household.
The point is so that the companies that sell it can make money selling it. Who buys it? Anyone who incorrectly believes that there is more of a point to buying it than there is. Anyone who incorrectly believes that it protects the child (it does not). Anyone who incorrectly believes it is a good deal (it is not).
Ideally insurance is bought by working adults only because there is a financial loss to the family.



Buying policies for children is a waste.



Having said this , the father or the main bread winner should have enough TERM COVER for himself / herself.



This will be of use for the children's education , in case the father dies early.
Did you ever see a death notice of a child in the newspaper. Especially one where it says "

contributions may be made to the xxx street branch of XXXX Bank.





Why are the parents asking that donations be made to a bank??



It is because is costs money for a funeral, child, adult,elderly person, and the parents do not have the money to pay for a funeral.
Are you some sort of joker?

Children's life insurance is the same as any other life insurance.

Just in case you still don't get it

life insurance = insurance that pays out in the event of death - whether the insured dies as a child or dies as an adult.
I had read somewhere long time ago, that is was not really something that had to be done.

Found a link with related discussion about it.
so they could earn money
It's sold based on three selling points:



1. Preserve insurability - you buy it when your child is born, and if they later develop a condition that would render them uninsurable, like type 1 diabetes, well, at least they have THIS insurance.



2. Build cash value - so that when they're ready for college, there's a little bit of money here to help them (very little bit - this selling point is very persuesive with people who are really bad at math)



3. To pay for a child's funeral. Also, this point is convincing for people who have little idea about statistics.



Me, I've been licensed for almost 25 years, and I'm a mom with three kids. And I don't have life insurance on my kids. It's a waste of money. I've a savings account, for "kids" (ok, it's really an investment account), where I've put $25 a month in since my oldest turned one. He's almost 20, and there's a little over $17,000 in there now. I'm WAY WAY WAY ahead of the game, from buying three life insurance policies . .. and even if God Forbid all three kids die, I'll have enough for their funerals.





But lots and lots and LOTS of parents buy this. One company - Gerber - even specializes in selling child life insurance, and they make TONS of money this way. (And I have no idea who Casey Anthony is).
2 purposes.



1) Children die to and their funerals are only slightly discounted because the casket isn't as much material, but it's still expensive. Where are you going to get $5-$10,000 for a funeral and maybe final medical expenses? If you have it then maybe you don't need it, but someone that lives pay check to pay check certainly does.



2) You have extra money and you just want to insure that your child will be able to get insurance as an adult.



You're certainly not buying it for college (because if they die, they're not going to college), you're not buying it for income replacement (because how much does that lemonade stand bring in really), and you're likely not buying it to covers debts or estate taxes either.



Best way, in my opinion, is to add a child rider to your own policy. It covers all of your kids for about $60 per year for $5-$10k. If grandma wants to do something extra have them send you cash. Buying a life insurance policy on them, if you already have it covered, is almost pointless. Look around on Yahoo Answers at how many 21 year olds ask "How do I cash in my Gerber Life Policy that my grandmother bought on me?" If they're just going to cash it in then just give them cash....assuming you have proper coverage.