Why to Buy Term Insurance for Your Children in 2021

To say this has been a difficult year would be an understatement, but the fact that you are even reading this is proof that it could have been a lot worse.

Around the world, we saw the cost of unpreparedness as national healthcare systems in some of the world’s most advanced countries were unable to keep up with the demand for intensive care beds. Then there was a shortage of respirators to keep patients alive. Compounding all this, the safety of hospital workers was under threat from the lack of personal protective equipment. The TV news became a stark reality show displaying scenes of families torn apart, people turned away from hospitals due to over capacity, and more heart-breaking, so many apparently healthy individuals in the prime of their lives being struck down.

In short, 2020 taught us all that bad things can happen suddenly and that is exactly why parents should be looking to buy insurance for their children in 2021. At first glance, you may feel this is rather unnecessary because insurance is about providing security for a family upon the demise of the main breadwinner after all. So why is insurance important for children who obviously have no dependents and no potential loss of earnings?

Life insurance policy options for children

Before delving into the importance of having a policy for your child, let’s consider what exactly we mean by a child insurance policy. Firstly, a standard life insurance policy for children brings together several significant advantages to support them throughout key life stages. This helps policyholders ensure that their child's future is not compromised and supports the family if someone dies unexpectedly.

The child life insurance policy offers big advantages in terms of health, education and lifestyle. A life insurance policy set up for a young child guarantees that they will have coverage even if a medical condition is developed in later life. Many parents and national healthcare bodies are very concerned about the possible long-term impact of COVID-19, which is still to emerge and then be understood. In any event, taking out a child life insurance policy today guarantees the future insurability of your child even if a medical issue arises in the future. For any family with a history of hypertension, diabetes, cancer and any genetic illnesses, they should urgently consider buying a life insurance policy for their young children.

For some parents, the enforced savings portion of the life insurance is also helpful as they plan for their child’s education and the cost of university. Another advantage is that the policy will automatically cover any future lifestyle choices of the individual as they take up different hobbies, such as scuba diving or windsurfing, or even activities linked to career choices, which may not be covered by many insurance providers.

Depending on the insured amount, it could also provide the necessary funds and financial security to enable grieving parents, who are presumably the breadwinners, to take extended time away from work to mourn their loss while looking after other members of the family. This kind of financial solution can be set up as a as a rider to the parents’ insurance plans. In both cases the premiums can be very cost effective. Parents can get a head start by setting this in place for their newborn baby. Starting early with a policy that offers the longest possible terms can help you lock in low premiums, while saving for your child's future.

In 2021, smart parents should start a discussion about their immediate insurance needs, how they can protect their dependents and loved ones and, at the same time, build resilience into what may be an uncertain future. Buying a child life insurance policy today will lock in the premium for as long as the child holds that policy, which is a huge advantage for immediate financial planning and keeps it affordable. Look out for a policy that will allow you, or your grown child, to buy additional coverage without having to undergo medical examinations as needs change and inflation kicks in.

Visit PNB MetLife to know more about life insurance, Term Insurance & Term Plan