Baby Life Insurance (Your Advice) – Design For The Poor – House Flipping Flop

Financial wake-up callThis is a question that I get on a semi-regular basis and one that usually elicits quite strong opinions. How would you answer this lady’s question regarding life insurance for her baby?

I want to know if I should get life insurance for my baby. My baby is eight months old and I saw a commercial on TV where I can get life insurance for her for about one dollar a month. This seems like an excellent deal, but my husband says that it is a waste of money. For only $12 a year, isn’t it worth the peace of mind to get to insurance?

I don’t understand why anyone would not get the insurance. Can you please explain this to me? Is there something that I am missing? I want my baby

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13 Responses to Baby Life Insurance (Your Advice) – Design For The Poor – House Flipping Flop

  1. Judy says:

    No, no, no, do not get life insurance for your baby. It’s a total ripoff. The reason you get life insurance in the first place is so that if one of the people who support your family dies, there will still be an income to fall back on. Even if you’re not an income earner in your family, like a stay at home parent, if something happened to you it would still cost money to replace the “services” you provide (not to be crass, but babysitting, cooking, cleaning whatever) So basically you’re paying money to make sure that if either parent dies, your family will not have to lower it’s standard of living. But a baby doesn’t bring in income. So you are just throwing away your money. Big rip-off!!!

  2. cheryl says:

    I disagree. When a baby dies, it will cost between $5000 and $10000 for all the expenses including funeral, headstone, etc. Trying to come up with that money in a short period of time while grieving for your child is stress that nobody needs. The insurance is so cheap that it is worthwhile getting just so if a terrible thing happens, you aren’t forced to endure even more financially.

  3. j.a.s.o.n says:

    By that reasoning alone Cheryl we should take out insurance on nearly everything bad that could possibly happen. Terrorism, an alien abduction, a catastrophic asteroid “attack”, a shark attack after a water-based plane crash or the simulatenous event of being in a car crash AND all the auto insurance companies in the world defaulting there are all examples of possible events that would be financially burdensome if they occurred. Here’s what you have to remember: insurance is priced to make the insurance company money. What this means is that your expected value of engaging in an insurance contract is negative. Instead of spending money on such insurance AND the dozen other things that you are needlessly spending money on, take that money and put it into an emergency fund (for example, instead of taking a $500 deductible on your auto insurance, take a $1000 deductible and invest the saved premium in a high-interst bearing savings account). That way, heaven forbid something tragic happens, you’ll be prepared AND you won’t be throwing your money away. A dollar here, and a dollar here, and suddenly we’re talking about real money.

  4. cheryl says:

    j.a.s.o.n – what you’re failing to miss is the peace of mind that the $12 a year brings. To know if something happens with your child that you won’t have to worry about money when you are barely making it paycheck to paycheck. While I commend you if your finances are in good enough shape to self insure, but many people’s aren’t. I’d love to get there some day, but I’m not there now and $120 saved over 10 years isn’t going to cover $10000 in funeral expenses if it does happen.

  5. cheryl says:

    That should be “failing to see”

  6. Teri says:

    I was anti-insurance or babies (esp. after seeing how useless the policy my MIL got on my husband – so he would have good insurance if he was ineligible in adulthood – well it is only $25k – not a lot of good for us today – and has cost her tens of thousands over the years – would have been better off invested).

    BUT now that I am a mother I have seen some women who have lost children say they were SO glad they had insurance on their children because they could not function or return to work for months or years. I honestly do not know how I could function if I lost one of my children either so from that perspective protecting lost wages in grief doesn’t sound like the worst idea. Of course, that would only be if you could get some really cheap term insurance. I haven’t actually gone out and made the purchase myself.

    Just an interesting perspective I don’t see mentioned much.

  7. j.a.s.o.n says:

    But what about all the other decisions that you make on the basis that it’s just $12 and oh, that piece of mind? They all add up, and if you didn’t make them you’d be saving a ton of money. On top of that, $12 gives me zero peace of mind when I think about my children dying.

    One thing that you might be failing to realize here is the fine print in that Gerber commerical (I assume that’s the one we’re referring to.) It says something like “rates start as low as $1 in the first month.” That signals (to me) that the rates are likely to go up, and that it’s likely the true cost is considerably higher.

  8. judy says:

    Lots of things can give you peace of mind but that doesn’t mean they are a good finacial investment. Maybe it would give someone peace of mind to send that money to help poor children–cause that would be good karma–what cheryl is talking about is an emotional thing, not a money thing. Luckily, in the country the chances of a healthy baby or child dying or infintesimally small. So, if it brings you solace than go for it, but you’re if you do a cost benefit analysis you’ll see it would probably be better to put your money on the hard eight.

  9. Debbie says:

    I’ve always thought the best way to make sure your baby is fully insured in case something bad happens is to get her health insurance and to get yourselves life, health, and disability insurance.

  10. Viola says:

    Personally I would not insure the life of my baby, but it is up to the individual and depends on the nature of the reason.

    I have 5 children and rather than focusing on their ‘death’ and having the money for their funeral, I focused on bringing them up in a positive manner. My children are all grown up now and I have 4 grandchildren. I must also say that in the United Kingdom baby funerals are free, so no one has to worry about the expenses.

  11. Matthew says:

    I sell insurance for a living, so I felt obligated to respond. I realize I am biased in this sense, so take my advice however you wil. Thinking about your babies death is grim and depressing. I have a child and that is the last thing I would want to think about. Life insurance on children does one VERY important thing that nobody here has touched on because so few people think about it. One day your little boy or girl will be grown up with a family of their own, and the will NEED life insurance. However, getting it at that time can be tricky for some. I see it every day. Issues like asthma or diabetes can disqualify you from ever getting life insurance. Bottom line: children’s life insurance is not about the death benefit, it is about LOCKING IN YOUR CHILD’S INSURABILITY! That is well worth the 12 bucks a year.

  12. Angela says:

    I think you should get the life insurance for your baby. I am getting ready to be a first time mom (due in two days) and even though it is grim, I often think of and worry about my baby dying from SIDS. To have this sweet little baby, and think that one day something might happen to him is horrifying to me. I know that if that does happen, I am not going to be of sound mind to worry about where the heck am I going to find the money to pay for a funeral and headstone. I don’t have family that could help me with that. I just got the Gerber life insurance in the mail today, and it states that your child can cash it in (get the premiums you paid over the years) if they ever need the money for college or whatever. Plus the premium will never go up in price. What you sign up to pay is what you will pay, the premium won’t go up. Most people aren’t self disciplined enough to keep money in a saving account and not touch it if something comes up. I know I can’t. So, as a soon to be mom to another mom, get the life insurance. You’ll be glad you did. And as for your husband, you can come up with $12 yourself and sign your baby up for the insurance and he’ll never be the wiser. Do it for your daughter and yourself. Good luck.

  13. jimbo says:

    Just keep in mind that a child is a liability, not an asset. You don’t insure liabilities. The chances of your healthy baby dying in their first 20 years is nearly null in the grand scheme of gambling. I agree with Cheryl in this forum. No, we can’t predict the future, but we should also not let our emotions of losing a child make bad or uninformed financial decisions. Insurance agents make commissions and prey on your emotions. Go to an insurance BROKER, whom works for your interest, to see if its a good idea based on your financial situation. Best of life to everyone.

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