Life insurance for a newborn baby is hardly the first thing on the agenda for most parents. But having coverage on a newborn could be important for all of the same reasons that it would be on anyone else in your family.
Life insurance for a newborn doesn’t have to be anything the least bit complicated. A simple, low-cost term life insurance policy is all that you’ll need. You don’t even necessarily need a lot of coverage, but having it would provide great peace of mind in the event that the worst should happen.
Even though a newborn obviously has no income to be replaced, there are still compelling reasons for having life insurance on your baby.
Locking in the rate when premiums are the lowest
None of us like to think in terms of life insurance in connection with a newborn baby. Statistically, the likelihood of a baby dying is extremely low, at least in the developed countries of the world. This is also why life insurance premiums on them are especially low.
There is a strong likelihood that you’ll purchase life insurance for your children at some time. But if you purchase a policy when they’re newborn, you’ll be locking in the lowest premium rates possible. You can take out a 20 year term life insurance policy that will cover them well into their college years. Once it expires, you can simply roll over to another term, or even consider converting it to a whole life insurance policy if the original plan includes this provision.
Clearing up medical bills
Despite the fact that the likelihood of a baby dying is so low, the need for life insurance can be especially high in the event that it does happen. Infants need special medical care, especially when facing a life-threatening illness or injury. That could lead to extremely high medical bills that may need to be covered in the event of the baby’s death.
Even though you have medical insurance, it is possible that co-payments and co-insurance provisions could result in thousands of dollars in out-of-pocket medical costs. In addition, there could be uncovered medical procedures that would also have to be paid out-of-pocket. This is particularly likely in the event that any experimental or unapproved procedures were necessary in an attempt to preserve the baby’s life.
All of this can be even more likely in the case of an infant. Purchasing life insurance to cover such an event isn’t wishing it happen, but rather being prepared in the unlikely event that it does.
Giving yourself a cushion during a painful period of adjustment
The loss of a child – especially an infant – can take a toll on everything that is happening in your life. It can cause you to lose time and income from your job, or even to lose money on your business. It may be many months before you’re functioning in a way that looks anything like normal. Having a life insurance policy could help to offset the loss of income at what will be a very delicate time in your life.
That cushion can also be valuable in the event that you are vulnerable to making less than wise financial choices as a result of the grieving process. The life insurance policy will provide money to back you up just in case.
You’ve probably heard the saying it’s better to have it, and not need it, then to need it and not have it. That especially applies when it comes to life insurance and children. You’re buying the coverage with the expectation that you’ll never need it.
The good feeling that comes from knowing “you’re covered”
Let’s end this on a happy note, by highlighting a “living benefit” of having life insurance on your newborn baby. As a parent, one of your most important responsibilities is preparing for contingencies. If you have a life insurance policy on your newborn, you’ll be covered in the event that the worst happens. There’s a good feeling that comes from knowing that you have a major contingency covered.
This is especially important if you have two or more children. The death of one will certainly impact the life of the other. You can think of having adequate life insurance coverage on each of your children as a way of protecting the others.
And if you do that right away with your newborn, you’ll have the situation covered from the very beginning, and at the very lowest premium rate possible.
