The joy of having a baby is priceless, but the actual cost can be pretty expensive. There are a lot of factors that play into the varying costs of delivering a newborn baby, like what state you live in or what type of insurance coverage you have. But what about your child? Will they need to be covered right away? Do they need a different kind of insurance? There are many questions surrounding newborn or baby insurance coverage – both health and life insurance – so it’s important to start finding answers to your questions right away.
Life and Health Baby Insurance
In terms of health insurance, it’s critical that you talk to your employer or insurance provider during your pregnancy so you know what is covered and what deductibles you may have. Most insurance companies offer maternity services throughout pregnancy, so you’ll also want to see what’s covered under that.
Once the child is born, there is usually about a 30 day grace period to enroll your newborn, but this is something you will also want to speak with your provider about to see exactly how much time you have. But for the health of your newborn and to avoid any unexpected charges, it’s easier just to enroll them immediately after birth. If you do not have health insurance, do not panic… several state-funded programs provide coverage for newborns and their mothers if they meet specific criteria.
So now let’s move to a topic that most parents don’t even think about…purchasing a life insurance policy for newborns. At first glance, it may seem completely unnecessary to buy a baby insurance life policy; after all, these plans are usually in place to act as a safety net to assist families after a parent or breadwinner passes away. Life insurance can help families pay off mortgages and other unexpected costs.
So why would parents need a policy for a child? This is still a highly debated topic, and there are several reasons why some choose to go this route. It does not make sense for every family to have life insurance on every child, so before you decide whether or not this is something you would want to do, let’s discuss some pros and cons of insurance for babies.
- Lower Rates Locked In
- If you buy a policy for your newborn baby then you will most likely have a lower monthly or annual premium. The downside is that you will be making more monthly payments and the payout might not be worth it once your child reaches a certain age.
- Guarantees Insurability
- When it comes to life insurance, companies have the option to turn people away or charge a higher premium based on age, pre-existing conditions, or any persons that they deem high-risk. If you buy life insurance for your child, then you are guaranteeing that your child will continue to have coverage throughout their adult life, even if they have a health condition.
- Funeral Assistance
- Again, this is something that no parent wants to think about or prepare for but in the unlikely event that something were to happen to your child – the life insurance that you purchased for them as a baby would provide funds for funeral costs, counseling costs, and costs associated with parents taking time off of work.
- Low Coverage Limits
- Many insurance companies cap the amount of their coverage policies for children between $50,000 and $100,000. So if your child grows up and wants additional coverage to make sure that their families are taken care of, they most likely will buy additional coverage or a different policy.
- Alternative Investments
- Yes, paying a monthly or yearly premium for your newborn does build cash value, but the return rate can be pretty low, which is why some families choose to spend their money on other valuable options such as cord blood banking, college savings plans, special classes, or other investment opportunities. Not all families can afford a baby insurance life policy and other beneficial investments, so it might be a better option for some families to do something else for your child with better returns – either financial or beneficial.
So when it all comes down to it, are these types of insurance for newborns worth it? The bottom line is that it’s important to sit down and see what makes the most sense for your family when it comes to life insurance for babies. If a family has the means for it, then it might be a good idea but it’s not completely necessary. Health insurance, on the other hand, is extremely important and should be considered a necessity.