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Interesting Reads

Do Newborn Babies Need Life Cover?

The insurance industry has developed the concept of life cover for newborn babies to enable parents to give their children a financial head start. Life cover for newborn babies is reasonably priced, and enables parents to pay for hospital treatment in case of illnesses, accidents, or disabilities, or burial costs in case of sudden death. Policies for newborn babies can be for a lifetime or a term of 10 years or 15 years. till the child has become an adult.

New insurance policies are being developed to deal with the growth in the insurance sector. Evidently, many people have already bought life policies for newborn babies. If you plan to purchase such a policy, look carefully before you sign.

Life insurance is an economic instrument that provides a financial cushion in case of accident or death. Its value for a newborn baby is doubtful, because life insurance is used by the breadwinners in a family to create savings for their dependents in case of their own injury, illness, unemployment, or sudden death. Life insurance policies enable the surviving family members to pursue their life after the death of the breadwinner in the family. Life insurance policies would enable the surviving family members to pay off debts and mortgages, and pursue higher education, to enable them to get a good start in their own lives. A life insurance policy to pay for the needs of a newborn child, who is not yet part of the workforce, seems unnecessary.

Moreover, many unscrupulous people have been known to get helpless people insured, name themselves as beneficiaries, and then do away with the insured party-this is a staple of detective fiction. What if someone unscrupulous were to do the same to an infant? There have been several cases of severely disturbed women ill-treating and even killing their own children. Life cover for newborn babies would simply give similarly inclined people an excuse to commit murder.

Most experts advise against the purchase of these policies because of their low face value. Term insurance policies for newborn babies are targeted at setting aside enough funds to pay for a college education. However, further education plans might be more suitable financial instruments.

Financial experts have discovered that parents spend a lot of money to insure their children, with little or no financial benefit. Parents should, instead, buy more insurance for themselves, to get an immediate tax benefit, and invest in further education plans for their children.

 

 
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