Child life insurance is one that provides financial reimbursement in case of the death of a person’s child. This type of insurance can also be used if the child develops a serious illness and would like to have life insurance when he or she becomes an adult. The insurance typically covers the costs that would be incurred for the memorial service, funeral and the income that a person loses due to leave of absence after the tragedy. However many people are motivated to buy such insurance because it appeals to their emotions.

• The most important point which is largely ignored is that in the event of the death of a child, the parents or family is relieved of the financial burden of raising the child. This may sound cruel but the basic ideology of child life insurance is redundant if seen from a purely financial perspective.
• The fact that you will not have to spend on the child’s education and other expensive needs implies that you do not need child life insurance. However, many people buy such insurance because of emotional reasons rather than taking the financial aspects into consideration.
• Another important point to be taken into account is that child mortality rates are decreasing steadily. Moreover the younger a person is, the less likely it is that he or she will die. This means that age is inversely proportional to the probability of dying and the advantage of this fact is taken by insurance companies who offer very low cost child insurance since the risk is very low.
• Deciding whether or not to buy child insurance depends on the age of the child and if there is any history of unusual child mortality in the family due to genetic reasons. However the fact remains that insurance companies are trying to sell a paradoxical product that actually burns a hole in your pocket. The need for child insurance may arise only when you are a single parent and are trying to make ends meet. In such cases the funeral expenses and the income lost due to the tragedy can be recuperated.
• The reality that the probability of a parent dying is more than that of a child makes it important that first priority should be given to the life insurance of parents. If you as a parent do not have life insurance or your spouse doesn’t have it then the first priority is to insure yourselves and your spouse. This will be more beneficial since as observed before, age is inversely proportional to the probability of dying.
• The simple fact is that young couples who have lost a child can have another one but a child who loses a parent cannot replace his or her father or mother. Of course the child can be adopted but it is important that the child should be protected financially by taking out life insurance on the parents first.
• Some other rare cases where child life insurance may be necessary are when the child is an actor or an artist or has a steady income. In such cases it is definitely advisable to buy child life insurance. Moreover it cannot be denied that there are child insurance policies that perform well and come in handy if and when the child develops some critical or chronic illness. The terms and conditions and riders usually differ from one company to another and some may offer extended protection and coverage in case of any such critical illness.

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