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General: Be Prepared: Insure Yourself

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    Please join us to discuss Be Prepared: Insure Yourself.
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    We have a term life insurance plan that covers our kiddles. My dad sold insurance back in the day, he said you would hate to have to get a loan out to pay for your kids' funerals and then remember it each time you made a payment. It didn't cost more to add the kiddles, since hubs and I were both getting covered...so we prob have a good company?
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    I've never heard of a free life insurance policy (except the "open an account and company x will give you a free minimum policy and then they'll try to upsell you for the next ten years"). If it's really free, then it's no problem. But generally paying for life insurance for a child is only paying for FUNERAL insurance. And it's a big money-maker for insurance companies. Generally any insurance that is a cash cow for the company is a cash DRAIN for customers.

    Much more cost effective to put the same money in a savings account and self-insure, particular when almost no one ever NEEDS this service.

    Think of it like this, you'd hate to take out a loan to pay for injuries to your child when a TV fell on his head, too. But would you buy tv-falling-on-head insurance? :)
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    Posted By: Alison Moore Smith

    Think of it like this, you'd hate to take out a loan to pay for injuries to your child when a TV fell on his head, too. But would you buy tv-falling-on-head insurance? :)


    Nope, that is called medical insurance :wink:
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    Generally speaking, true, but note that there are all sorts of specific health riders/policies in spite of available general health insurance. For example, what if this SPECIAL insurance also pays to replace your TV and carpet damage? :wink:

    Then think of it like this: you'd hate to take a loan out to pay for wedding expenses if your child is deserted at the altar. But would you buy dumped-on-wedding-day insurance?

    The point being that buying insurance for things that are incredibly unlikely to occur and expensive when compared to the actual benefit in the event of the really unlikely event are a bad place to put money. The house always wins. :smile:
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    oh, ha, I thought you meant insurance for the kid with the bump, not the broken tv, ha.

    And I guess it depends on the amount of life insurance. With ours, it truly does not cost us more to have our kids added, so for every depenedent we have under 18 years ( I believe it is up to age 18 ) they are covered 10k each. Now hubs and I are covered 250k each, that includes disability insurance which is a real possiblity with my hubs disease, so it is smart for us to have it all... actually I think we upped hubs to 500k.

    Another way my dad looked at it was, you don't buy auto insurance expecting to get in an accident right? Some people will pay for it their whole lives and never have a single accident. Granted, states require it, and they should require life insurance. So many people lose not only a loved one but everything else because all of a sudden this huge expense occurs and sometimes breadwinner is now gone and bills pile up.

    Not that you said life insurance was bad, you said smart move to have, I just think if it isn't much more to include your kiddles, I would do it. Maybe it is just front of my mind because I have seen SO many kiddles die the past few years that I see how it can be a relevant thing to have. I think death is a much more pressing and worthy issue to be prepared for than broken tvs or left at alters.
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    If it makes you feel better or more secure, go for it. It may be worth the cost to you. :)

    I'm simply speaking statistically, not emotionally. One in about 3,000 children die. In a cost-benefit analysis you are wasting money if you insure things that are almost sure bets for the insurance company. Sure, you are glad you have it IF you end up being the miniscule percentage that needs it, but you are extremely likely to be throwing your money away.

    If ANYTHING happens to you -- after the fact -- you will be thrilled to get money to help pay for the event. No matter what the event is, when it is a KNOWN entity, it's great to get a settlement. But given that we insure only with UNKNOWNS, the only reasonable way to weigh the opportunity cost of any given insurance over another, is statistically with a cost-benefit.

    Let's say an insurance policy costs $10 per month. Statistically, you are way, way ahead to use that to (1) save for college, (2) invest, (3) increase PARENTS life insurance, etc., than to buy life insurance on a child.

    It's like the extended warranties. Sure, if you have the one in every 2,000 dishwashers that is faulty, you're glad when you can get it fixed on day 367. But 99.997% of owners are losers in the deal, not just because the event is extremely unlikely, but because even if the extremely unlikely occurs, the financial hit is extremely limited.

    BTW, it sounds like you actually have a rider for your kids, not their own policies. If the cost is negligible it doesn't hurt and generally that would just be for burial expenses.

    Money Magazine's take on the issue.
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    I can see that, like, for sure have insurance on yourself first, and then if you can add kids, go for it. It's not like we went out and sought "gerber life insurance" or what not. Then again, maybe I should have? I don't know how much those are? Now no way would I get a policy over 10k for kiddles. They are not bread winners, it is strictly funeral costs. It is seriously mind boggling to think of getting a 250k policy on a kiddles, almost suspicious in this day and age.

    1 in 3000 huh, not the best odds when I have 2 of how many children?

    So random q, if it were not required, would you insure your car? I am a great driver, never been in an accident, why should I have to pay 1200 dollars a year to insure our two cars? Kind of same thought of insurance isn't it? A sure bet that the insurance company is getting my money that I will never get back? It's all a gamble right? Medical, we use quite often, so I don't have any arguments there.
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    Most property auto insurance doesn't make good financial sense. Liability does, however.
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    Saweet, we have liability only, so doing something right :wink:
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    :bigsmile:

    Most people don't really know what their auto policy covers. When a car gets below a certain value, insurance is just money in the trash because the insurance company will total the car with very minor damage. The collision/comprehensive is what costs the most money, but is generally only requires if the bank owns your car. I'd still get it on a newer car -- but with a high deductible, etc., and without all the add-ons. You can really slash your rate.
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    Yeah, we have bought both our cars with cash used from people. And they are older, so we were like, cheapest insurance possible :bigsmile:

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