The topic of whether or not you should buy life insurance for your children is a sensitive one. To many the idea is inconceivable: it is highly unlikely you would suffer from the traumatic loss of someone so young. It may seem far more sensible to put money into your own life insurance policy, as, after all, you want it to be the case that your children will receive financial help in the event of your death; the idea that the opposite may occur is upsetting and unlikely.

So it may come as a shock when parents, and indeed grandparents, are asked by insurance firms if they would like to include their children on their life insurance policy. One’s gut instinct would be to reject the offer, but it is perhaps worth putting aside the emotional response for a minute and considering what arguments there are in favour of such a decision.

The purpose of life insurance is usually to provide for essentials on the event of a breadwinner in the family dying. Such a death may have sever adverse financial consequences, as the regular income sustaining the family is lost, and life insurance may help the family adjust and find its financial feet in a traumatic period. Yet there are practical reasons for such a payout too. Funeral expenses can be surprisingly steep, and some families will not have put funds by in the eventuality that they will have to pay for one. Purchasing life insurance for your children would pay for funeral expenses should the worst occur, and in this regard their having a policy is as sensible as you having one. And whereas your policy is likely to compensate for the loss of family income directly, buying life insurance for kids may also do the same thing indirectly. The death of a child is likely to cause sadness that seems insurmountable, and the family will need time to grieve and deal with traumatic loss. In this eventuality it may be that financial instability may occur, as parents’ and grandparents’ lives are turned on their head, and days, weeks, even months of work are lost as the emotional cost of loss takes its toll. Life insurance for your children may help if this occurs.

The argument against buying life insurance for your children is that it is largely simply unnecessary. The worst, thank goodness, is unlikely to happen, making tolerating this risk one that is more likely to be advantageous than many others. Moreover, many families have funds set aside for emergencies including funeral expenses. Besides, in the event of a child’s death it is inconceivable that family and friends would not aim to help out – financially as well as emotionally.

So think carefully before accepting insurers’ offers to add your children or grandchildren to your life insurance policy. Although there are circumstances in which such a policy may be advantageous, it is prudent to weigh up the risks involved to calculate whether children’s life insurance is really necessary. If you have doubts, consider whether putting money into savings for schooling costs or university education might not be a more sensible option.