Five things to know about children’s life insurance
by Bill Barrow, Associated Press Writer and Tom Murphy, Associated Press
July 08, 2014 01:02 AM | 4169 views | 1 1 comments | 11 11 recommendations | email to a friend | print
Justin Ross Harris
Justin Ross Harris
ATLANTA — Policies for children represent a small fraction of the life insurance market, but they made the news this week after a court hearing for a Georgia man accused of killing his young son by leaving him in a hot car.

Testimony and court documents revealed Justin Ross Harris and his wife had two life insurance policies for 22-month-old Cooper Harris, one for $2,000 and one for $25,000.

Prosecutors have portrayed the 33-year-old Harris as an unhappy husband who was exchanging nude photos with several women. Defense attorneys say the death was a tragic accident. Harris remains in jail, charged with murder and child cruelty.

The insurance policies were mentioned among numerous details from the evidence against Harris and weren’t singled out by prosecutors in their arguments.

Still, the case has drawn attention to policies families sometimes purchase for children. Here are five things to know about the children’s life insurance market:

How do the policies for children work?

The policies are typically purchased by parents, grandparents or anyone directly related to the child, according to Steve Weisbart, chief economist for the Insurance Information Institute.

Premiums paid into the policies vary according to the terms. Generally, the higher the death benefit — what’s paid out to beneficiaries if the insured person dies — the greater the premium. Insurers require anyone buying the policy have an “insurable interest” in the person covered, meaning the buyer wants the person covered to actually live.

Insurers attach conditions to the death benefit

Insurers require documentation of how a covered individual dies, and the policies will not pay out if the beneficiary is convicted of murdering the person covered.

Policies can be savings devices

Life insurance policies typically have a cash value while the covered person is still living, with the amount based on premiums paid over time. Often, a parent or grandparent buys a policy with the intention of giving the child the option later in life of using the policy as a cash source.

Policies for children typically have less benefits

Policies for adults, whether purchased individually or through employers, typically offer much higher death benefits than those purchased for children. Weisbart said a $5,000 to $10,000 policy is common — amounts to help parents pay for a funeral.

Child policies a small slice of overall market

Weisbart estimates life insurance policies on children represent less than 1 percent of the overall life insurance market, both in terms of the number of polices and the dollar value.

Etti Baranoff, associate professor of insurance at Virginia Commonwealth University, added, “The nature of life insurance is to provide for economic security if the parent dies, not the other way around.”
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mom comment
July 08, 2014
I do not find it odd to have a child insured. When my oldest was born I purchased in addition to my work policies which I raised to the maximum 5x my Salary when she was born and named my Estate, and then it covered her for $5,000. I also purchased a $100,000 policy from NY life on me, with a rider with a $25K policy on my daughter. The purpose of having non-work policies and a child policy is that my child will always have some insurance. My child has developed some conditions and no one would write her an individual policy now. She will be able to continue the $25K policy I took out as an Infant.

My second child, when I married her father we purchased insurance on him and added the child rider on him of $25K. When we divorced it was in the child support orders that we each maintain a minimum of 50K insurance on each other and he maintain 25K on child payable to me if something happened to her. He then did not pay the payments let the insurance drop and was found in Contempt of court. I ended up buying a Globe life insurance on my daughter for $25K because, I have seen through a cousin, that you never know what will happen with a child and you may have to bury them. If a child dies unexpectedly it will reck havoc on your life and you will miss work. $25K will never make up for the loss of life of a child. My cousin grieves her son who was murdered 20 years ago. Our whole family does.
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