A common pattern: a young couple has a baby, and within a year someone has offered them an education plan or a policy for the child. They buy it, lovingly.
Meanwhile, neither parent has meaningful cover on their own life.
I understand the instinct. Wanting to give your child something is a good instinct. But if I'm being straight with you, the order is backwards.
Why the earner comes first
Ask what the child depends on. Not the plan. The household.
The child's future rests on the parent's income: food, school, a roof, a decent medical bill if they're sick. If that income stops, a savings plan in the child's name may be a thin cushion against a thick problem.
Protecting the earner protects the child automatically. Insuring the child without the earner is like insuring the contents of a house while ignoring the roof.
What the numbers tend to show
A child's own mortality risk is low and the financial loss from it is, bluntly, small compared with the loss of a working parent. The expense that hits a family hardest is the loss of income of the person who carries the household.
That's why, in a simple order of priority, I'd put it like this:
1. Income protection for the people who earn, through life cover and, where possible, critical illness. 2. Health coverage for the whole family, so a hospital stay doesn't wipe out savings. 3. A funded emergency cushion. 4. Then savings for specific goals such as education, and cover on children if you want it.
What about the education plan?
Education funds are a legitimate goal. Many families want one. The question isn't whether it's good. It's whether it's next.
If the parents are underinsured, the first job is to fix that, because the education fund only works if someone is alive and earning to keep paying into it.
The part that's emotionally hard
Buying for a child feels like love. Buying for yourself can feel selfish, or even morbid. Many parents, mothers especially, put themselves last in the line by habit.
But think about it from the child's side. What they will need most, if something happens, is a household that keeps going. That requires you to be insured.
What to do
1. List who earns in your household and how much it would take to replace that for several years. 2. Check what cover each earner has, including group cover at work, and whether it will stay. 3. If there's a gap, fix it first. 4. Then look at the child's plan with a clear head.
A policy on the child isn't wrong. It just shouldn't be the first thing in the house.
The free Life Ready Checklist at lifereadywithvenus.com has a page for working through this at your own table, free and with no sign-up.
