Updated: Jan 31, 2019
The death of a child is a parent’s worst nightmare, especially if young children are involved
Young children present an unexpected, unwelcome financial and emotional familial loss. Will this burden fall upon the grandparents who certainly have not planned for a premature death of their child or child-in-law and may now be called upon to financially support a grandchild?
Interestingly enough billions of dollars are spent every holiday season and birthdays to buy gifts. Many of those gifts will be placed on a shelf or in a drawer, possibly forgotten and seldom used. Alternatively, a gift of term life insurance will provide an inexpensive means with an enduring benefit of protection against the loss of either or both parents of a grandchild and, with that loss, the future needs for the grandchild’s upbringing, medical, and educational.
An untimely death often times leaves the grandparents, who become the insurers for the failure or the inability of the ill-prepared parent to protect against the orphaning or loss of either of them. Having experienced this firsthand, I can tell you that my thoughts of completing paying for my children and now enjoying a future retirement with my wife less encumbered was wrong.
We quickly discovered when the bread-winning parent died that income needed to be replaced and additional costs of child care needed to be covered, not to discount the tremendous emotional upheaval that was wrought upon us.
The question becomes, will the grandparents be in a position to help as the dynamics of the families change.
Nobody likes to buy life insurance and it lacks the tingly feeling that typical presents offer. However, the cost to the surviving family, if the parents of a young child have failed to provide for the financial security, can be financially devastating and impose an unfair burden on the surviving parent or grandparents.
The changes in economics and family dynamics arising from the untimely death of a child can add an additional financial burden and perhaps distancing due to the change of family dynamics for the grandparents.
Term life insurance can provide an inexpensive alternative to covering some or all of the financial impact from the premature death of parents with young children.
Responsible parents, wanting to provide for their children in the event of an untimely death but lacking the resources to support ongoing child care and education, can find term life insurance one of the best alternatives to one of the worst events. It can provide a cheap solution that will not erode the retirement nest egg of grandparents, or for the family that cannot afford the loss of one or both parents the term life insurance can provide a very rational solution.
The use of a guaranteed level premium term life insurance policy will provide the greatest amount of financial security for the least amount of money. As an example, a 20-year level premium term life insurance policy for $500,000 of death benefit on a male child 35 years old will cost about $350 per year.
So the next time there is a holiday with gift-giving or a birthday, consider the alternative to the X-Box or down pillows that cost approximately $300 and purchase something that will provide comfort to all concerned. With this simple planning, these unexpected financial burdens can be eased inexpensively while the parents are in good health.