Why parents should consider buying life insurance for kids

IMAGINE an insurance policy that paid out in full, no questions asked and for which you never paid any premiums. Sounds too good to be true?

Well, believe it or not, many people have this kind of insurance policy. Where can you get one, you may be asking? Mum and Dad.

As a parent, all too often you become the insurance company.

It is a given we take care of our kids when they are young. But what about as adults?

Perhaps it's time you had an adult conversation with your grown up child about life insurance and minimising risk.

I recently had a client who took out life insurance for her two adult children.

When young and healthy, life insurance and policies that pay up when you are ill or unable to work are usually relatively cheap and can often be arranged through super.

Your child may or may not be willing to take out such insurance.

In that case, have you considered whether you want to take the risk or would you prefer to pay for all or part of the insurance policy yourself as really you might need the insurance as much as they do?

*Christoph Schnelle is the principal of In Your Interest Financial Planning Pty Ltd and Auth Rep 308223 of FYG Planners Pty Ltd AFSL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances.