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Wed 5 May, 2004 03:19 pm
Fortunately (or unfortunately) my husband is beginning to work for an insurance company. As he learns more or as the insurance company brain washes him more, he keeps bringing up to me suggestions on where we should insurance ourselves and where we should not. If you cannot tell already, I am pretty skeptical about some of the suggested insurance thoughts. I am also the practical one whereas my husband likes to "jump on the band wagon" without thinking things through completely.
O-K, the newest thought is to by life insurance for our young children. Seeing it is cheap when they are a toddler and a pre-schooler, this is the best time to insure. I do have a small amount I have insured them from work so I do not think we need further insurance for them. He tells me about one person in the office whose child has diabetes and as an adult will be uninsurable. I then did a quick search on google and found that all the financial advice websites on insuring children says not to unless your child is a child actor or you have a history of medical issues. The changes will be so slim that your child has an uninsurable medical issue as they become a young adult and even if they do, there are insurance companies that special in insuring these types of individuals. Of course the insurance company related websites all suggest that you should have life insurance on your children for the reasons my husband states.
I do work in the financial industry, but not in insurance. Do any of you have such knowledge? What is your opinion? And are there any of myths or brain washing suggestions I should expect in the future. I like to be prepared with facts. My husband is open to listening and to my thoughts - he does realize that I usually am the more practical and consider all aspects so this will not cause a fight.
I'm certainly no insurance expert but I do have a child that is a diabetic and she had no problem getting 30 year level term life insurance on her own. (She did have to get a letter from her doctor saying that her condition was under control but that was it...)
I always had insurance on her but it was a 20 year term policy that wasn't renewable.
I'd have no problems suggesting that someone get a life insurance policy for their children but all you need is a term policy that is enough to pay for a funeral and burial should the unimaginable happen (i.e. $15K-$20K).
I agree with fishin': most life insurance policies on children are, in effect, "burial policies" (policies that cover the costs of a funeral, normally with payouts of less than $40,000). Furthermore, these are invariably term policies, with or without a renewal option when the child reaches a certain age (usually around 20-25). Unless the kid is one of the Olsen twins, there's really no need to get much more insurance than that.
When the kid reaches adulthood, s/he should be looking for whole life policies rather than term insurance. Whole life policies are investment vehicles as well as insurance -- they build up a cash value -- and they don't expire as long as you pay the premiums.
As for other insurance tips: (1) never buy accident insurance; (2) never cancel your previous health insurance until the pre-existing condition period has run on your subsequent health policy; and (3) never get into a knife fight with an insurance agent named Pedro.
and if your insurance agent is named Marvin the Torch, I would buy his house insurance.
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