Do I need life insurance for little ones?
When my second child was born, I was approached by an insurance agent who thought that I should consider purchasing life insurance policies for my children. The case, as I recall from my then-still-foggy-from-baby-tending mind, was to have money available in case of the unthinkable; equally valuable, it was suggested, was a life insurance policy guaranteed for...for...well, life, if my child happened to have a chronic condition that would render him unable to obtain coverage later in life.
The idea of obtaining life insurance coverage for my children seemed unnatural and creepy.
But, was I being an irresponsible parent if I didn't buy a policy?
Unable to think rationally about this offer, I consulted friend and colleague Dr. Nita Royal, who has a doctorate in financial education and, at that time, presided over the local money management advisory board of which I was a member. She told me that the purpose of life insurance is to replace income. And, since children typically don't earn income, they don't need life insurance policies.
So, I didn't buy an insurance policy and I felt like a responsible adult.
For an expanded, enlightening discussion on this topic, see Bankrate's Life Insurance for Kids?