Comments on: How To Include A Baby In Your Financial Plans

By: Connie

Connie — Fri, 12 Sep 2008 14:52:14 +0000

Wow thanks for the great comments everyone!

As for the baby life insurance, we do pay for a small amount each month. This is basically to insure that we could have a lump sum of money available for burial in a worst case scenario. No one likes to think of that, but it’s better to be prepared.

Burial costs are not really that expensive though, so once we have a designated amount of money set aside in a savings account for her, then we will probably drop it. Obviously, we are praying that money will go to something, anything else, but in the meantime, we’re covering our bases.

God forbid, but if something were ever to happen to our daughter, the last thing that I will ever want to do is worry about the expense.

Also, if we choose to keep the insurance, she can pull the value at 21 and use it for whatever she wants, or continue on with the insurance. It’s less than $10 a month for peace of mind. We are putting away $50-$100 a month into her savings, and an additional $50 into her college account as well.

Let’s see, as far as a trust goes, that’s excellent advice, and really should have been incorporated into this article. Maybe we can do a seperate follow up on just that!

By: Jim

Jim — Thu, 11 Sep 2008 22:09:08 +0000

I also don’t see how life insurance for a child makes sense.

Jim

By: Giddy Up

Giddy Up — Thu, 11 Sep 2008 16:29:06 +0000

Just make sure you get that insurance form in to your insurer or employer’s HR Dept within 30 days of the birth. I got the form in advance, along with the fax number to send it to because I didn’t know if there would be complications with the birth that would keep me from returning to work to do all the paper work before the 30 days were up. Missing that deadline WILL cost thousands.
Also agree that there is no need for baby/child insurance. wasted money.
Another tax saving move is to open a 529 education account in their first year and start donating the max that your state allows as a deduction. In VA that’s $2k/yr. If you got a few kids, that’s a chunk of change.

By: BSF

BSF — Thu, 11 Sep 2008 13:50:01 +0000

Agree with other posters that life insurance belongs with the parents, not the child. Make sure that a good part of any beneficiaries of policies should include whoever you decide will take care of the children in case of both parents dying. You want to make sure that the people raising your baby have the means to do so. That is why they should receive a majority of the beneficiary funds if your child is young and you both die. As your child grows older, you could change the amount to reflect that the child may have some opinions where he/she goes in the event of your death.

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Thu, 11 Sep 2008 13:34:21 +0000

Please don’t name your infant as a joint owner of your financial accounts. What a mess that could create. Instead, establish a trust in your will/estate plan to handle the needs of your minor children.

Why would you want to buy insurance on an infant’s life? Don’t understand the money wisdom in that.

By: Steve

Steve — Thu, 11 Sep 2008 13:25:12 +0000

I agree with the first commenter about baby life insurance being unnecessary. Maybe the author or someone else can enlighten us.

By: James@capitalcouplesfinance.com

James@capitalcouplesfinance.com — Thu, 11 Sep 2008 13:08:13 +0000

Wow! You’re thorough. My wife and I just found out we’re pregnant and I can’t imagine planning exactly how we’re going to raise them from the get-go. Hats off to you though.

Some of these things, like getting a will, life insurance, and updating your beneficiaries, I would even do before the baby is born. Then you’d have to update accordingly once he/she arrives. These are just part of making sure your family is protected in case of disaster. Also, long-term disability insurance might be a good idea to protect your income should you become incapacitated.

By: CK

CK — Thu, 11 Sep 2008 12:32:15 +0000

Just adding your child to your accounts as a beneficiary could turn out pretty ugly. What happens when your child is (pick an age) and you and your spouse pass? That’s right, the kid get’s all of the money with no over site. Yes of course you raised your kid right I’m sure it will be just fine. Get a trust.

In my view life insurance is to protect dependents in case an income earner dies. Since my baby doesn’t make any money I’m not buying any overpriced/unnecessary life insurance for him. If the worst happened then burial costs would be paid from an emergency fund.