The Best Child Insurance Is a Quality Insured Parent.
Parents sometimes think more about child insurance or children’s life insurance than their insurance. However, is a child’s life insurance always a necessity? What is more critical, insuring children or their parents? How to get the best life insurance that will protect your family?
The reason why people take out life insurance is simple: life insurance can at least partially secure your family in the event of death or other health complications when there is a loss of income.
You are not dependent on the income of your young children (they have none), but on the contrary, your children are dependent on your income. That is why, in my opinion, it is essential to have quality insurance for yourself as a parent in the first place, and only then for children.
In addition, you can add your children to your risk life insurance. It is a simple and often cheaper solution for child insurance.
Insure yourself first, then deal with your child’s insurance
You can take out the best child insurance in the world, but it will still be ineffective if something happens to you and you do not have quality life insurance that will cover the child and you.
Only when you take out quality insurance for yourself is it time to think about child insurance, which can be crucial. This is especially true if you do not have sufficient financial reserves. In my opinion, its importance is in second place. The first is parental insurance.
If you are already going to insure your children, the most important thing is to have insurance to help you cover all problematic situations, such as:
- severe injuries to the child,
- serious illnesses that require long-term parental care,
- and all conditions where one parent will have to leave their job longer.
Without life insurance for yourself, you cannot adequately protect your family in the event of a loss of income. When you don’t have a payment, the whole family, parents, and children have problems.
What is suitable for child insurance, and what is already a waste of money?
The market offers a wide selection of insurances that cover different situations. So insurance is not like insurance. Clients often pay children completely meaningless insurance, which costs a lot of money and does not solve anything. If you have decided to pay life insurance for yourself and your children, pay attention to its quality settings.
These are the most common risks that parents insure for their children (not all of them are necessary):
- permanent accident insurance,
- children’s critical illness insurance,
- accident insurance for children,
- daily accident compensation,
- hospitalization insurance for children,
- child death insurance,
- savings folder or insurance for children with savings.
The most important is to cover insurance risks that cause long-term and permanent health consequences, such as critical illnesses, permanent results after an accident, long-term PN, or the death of one parent. These conditions will cause a long-term loss of income and constantly adjust insurance premiums to the lost revenue.
Minor injuries such as broken arm, weekly PN, etc., are often an unnecessary waste of premium money. Of course, even such situations need to be considered, but our financial reserve is enough to solve them. You don’t have to deal with these little things in child insurance if you have it.
Similarly, there is coverage in the event of death in children. This morbidity has no place in child insurance. I can’t identify with child death insurance. Should such a tragedy ever occur in your family, funeral expenses should be covered by your financial reserve.
Specialized insurance products for children vs. family risk life insurance
Insurance companies for children invent various technical developments. It would be best to be careful when choosing them and not let yourself be unknowingly blackmailed by marketing. You always have the opportunity to select a product where you only pay for what you need in child insurance.
Child life insurance
Several insurance companies offer unique insurance products for children. You will most often encounter the following child insurance policies on the market (insurance companies no longer sell several of them):
Provital Junior, Municipal insurance company
Lienka, AXA insurance company
I’m not sure if insurance companies are always interested in offering quality insurance for children or care more about make money from marketing.
You may know this from other goods as well. E.g., what is the difference between ordinary Sav and anti-fungal when the chemical composition is the same? In packaging, graphics, titles, caps, and what else? Included. The special Savo against mold costs 42% more when I looked at it in a specific store.
Same content, different marketing, and different price. It reminds me of what I see when comparing specialty products for children and standard risk life insurance.
Family risk life insurance
Family risk life insurance is ordinary risk insurance where you can insure other members of your family and yourself.
In addition to the life partner, you can insure your children are in this insurance. You can provide the same risks that “special” child insurance offers.
As a result, you can insure your children are incomparably cheaper firstly because there is a lower price due to more significant discounts and also because the insurance company will not force you to save for children through insurance or push into various insurance packages, where in addition to what you need, you may also need to insure unnecessarily.
In addition, family risk insurance is very flexible, and you can adjust it at any time as your life situation changes.
Insurance is not suitable for savings.
I probably won’t write much about this. I do not recommend combining savings for children through insurance. There are high fees in insurance policies. There is often a lack of transparency in costs. Sometimes, such a package (a combination of insurance and savings) can limit the client in more fundamental changes in life insurance contracts. I covered this topic more in the article ” Why does investing in life insurance take you money? ”
How to proceed when setting up and choosing life insurance?
Having insurance does not automatically mean that you are also well insured. Sadly, by choosing a product and signing a contract, people’s interest in their life insurance ends, and many of them have no idea what they are insured for and not at all what sums.
There is no universal insurance setting. Therefore, set it up effectively to make sure that your insurance will cover all the situations you need.
1. Choose insurance risks
The most important are insurance risks, which can cause people long-term income shortfalls and negatively affect the living standards of the whole family in the long run. These include permanent disability insurance (not only permanent consequences after an accident but also illness), death insurance, and critical illness insurance.
With life insurance, avoid risks where there is only a short-term loss of income. It will unnecessarily make your insurance more expensive.
2. Determine the amounts of the sums insured
You have chosen insurance risks according to the needs of you and your family. Now is the time to decide on how much to insure them. It may sound simple, but it’s quite a complicated question. A good financial advisor (financial intermediary) will help you with its solution.
The sum insured for each risk must always be such that you can cover your subsistence expenses liabilities and provide for your family. With the correct settings, you should maintain your standard of living without any problems. Always consider the following when calculating:
- the number of loans and other liabilities,
- subsistence expenses,
- partner income and passive income,
- the amount of savings,
- other assets (real estate, securities),
- people who depend on your income,
- special individual requirements.
You should constantly adjust these amounts to the current life situation to always be adequately insured. Always pay only for what is needed and re-evaluate your life insurance once in a while. Therefore, always take into account the flexibility of insurance when choosing.
3. Choose a specific insurance company
You have something to choose from. some best insurance companies are operating in worldwide, which offers life insurance. Which one is right for you? Contact an independent financial advisor with an insurance license if you do not dare to orient yourself in this. The following facts may also be taken into account when choosing insurance companies:
- name, history, and financial strength of the insurance company,
- exclusions in insurance,
- insurance price,
- availability of branches, settlement of insurance claims, good communication (info lines, online communication).
After a shortlist, it is still necessary to compare offers and find a compromise between price and quality insurance coverage. Only then will you choose the insurance that you take out.
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