Of course none of us like to think about anything bad happening to our children, but the fact is that many young children each year are diagnosed with serious medical conditions, and some tragically lose their lives through accidents or illness.

Although life insurance cannot stop these events from happening, it can help to ease the financial impact of such events, and in some cases it can give your child a better chance of survival and quality of live.

Life insurance for children comes under the trauma insurance category, however unlike trauma insurance for adults, children’s trauma insurance will pay out in the event of death as well as covering a large number of serious health conditions.

How life insurance for children works

Children’s life insurance can work differently depending on the insurance provider.  Some insurers simply offer a standard level of cover as a no-cost option in the parent’s insurance policy, whilst other insurers offer variable levels of cover that will have an effect on the premium.

One thing that all children’s insurance policies have in common is that they can only be taken out as part of a life insurance package held by at least one of the child’s parents.  In most cases the parent must hold both life insurance and trauma insurance for themselves.

What children’s insurance covers

The specific conditions and events covered by children’s trauma insurance can differ between insurers.  Most policies will cover the child’s death, and each policy will also have a list of specified conditions that will be covered by the policy.

One of the policies issued by a major Australian insurer covers the following common conditions:  Cancer, open heart surgery, brain damage, major head trauma, meningitis, meningococcal, lung disease, kidney failure, liver disease, loss of hearing, sight or speech, loss of limbs, severe burns and major organ transplant.

This is just a sample from one policy available, and as we can see there are a large range of conditions that can be covered by a child’s trauma insurance policy.

How insurance can help

One part of insuring a child is protecting against the financial impact of losing them, but arguably a much greater benefit is the lump sum of cash that can be used as a ‘war chest’ to fight off any conditions that are threatening your child’s life, or to cover expenses in  an attempt to improve your child’s quality of life.

As outlined earlier, life insurance for children can cover a diverse range of conditions.  If your child was to suffer a critical illness, the funds from the insurance policy can be put towards accessing the best medical care in the world to improve your child’s changes of survival.  A potential $250,000 insurance payout can give your child access to medical treatment usually reserved for only the very wealthy.

The funds can also be used to improve your child’s quality of life if they were to lose a limb or one of their senses.  The funds from the insurance policy can go towards accessing the best rehabilitation services available, and therefore giving your child the best chance of retaining their quality of life.

Is life insurance for children worthwhile?

As parents, we would all do anything for our children, and in the case of a serious medical event, often money is what is needed to access the highest level of care.  For the sake of a few dollars a week you can ensure that money will not be an issue when your child needs it most.