Insurance for Kids?

Let me start off by saying I do think insurance is a good idea.  Let’s face it having some coverage when REALLY BAD things happen is a smart move.  I don’t like paying for insurance for things that are SO minor that I’m amazed they sell the product or have a minor impact on my financial well being.

Case in point.  There was a parents meeting last week at my son’s school.  We got copies of the school calender and then an optional insurance flier.  I read the cover and had to cover my mouth not to start howling with laughter.  A company was selling health insurance for kids.  I kid you not.

The cover featured a little story about a kid who fell at school and broke an arm and had to have some dental work done.  It then went on to mention even with having insurance at work, the family still had to pay $750 in expenses.  I sat there reading this thinking “Ok, so what?  Isn’t that what an emergency fund is for?”

Then it occurred to me.  Ok, how likely do you think it is that ever parent in this room has an emergency fund of some kind?  I would bet most of my retirement savings on the fact most of them didn’t have one at all.  So hence the marketing campaign on this product which likely does sell to some people out of fear.

Likely it works too and they get a few sales every year.  It is rather sad that people don’t realize how easy it is to sell insurse yourself for things under a thousand dollars.  Just save up $1000 in a high interest account and sit on it.  If you need it use it, but if you don’t use it save the money you would have spent on insurance towards something else.  It’s amazing what you can save by taking on a little risk yourself.

8 thoughts on “Insurance for Kids?”

  1. I’m lucky I guess having my work insurance cover my kids for most dental work and any prescriptions they need, so I won’t comment there. However, I’m a firm believer in having a couple of years salary (yours) life insurance in your children. You never know how the death of a child will effect you, and having the freedom to take some time off of work to gather your thoughts is a great thing to have available. It’s pretty darn cheap too.

  2. Well, for sure the kids need helth insurance (at least Dental, which I use quite extensivly at the moment). The best option is to be covered as part of your benefits at work, and for sure I won’t go after the first flyer I get

  3. I have looked at a number of different insurance plans and for the life of me I cannot see the financial benefit of a dental plan. It seems to me that at best the premiums are a way of evening out the payments, but you don’t pay any less with a plan. It’s a different matter if you have an employer providing the benefits, but not for self-employed families.

  4. I got the same form you did and had the same reaction you did (same school division, I bet).

    For the record, my son broke his arm two summers ago playing on our front lawn and it cost me nothing. He even got a cool, waterproof cast, so it didn’t wreck our month at the lake.

  5. While an emergency fund is nice for common expenses, insurance at a minimum should be used to provide coverage in catastrophic events. In the case of health coverage, if an individual or a spouse does not have coverage at work, they may be wise to buy a basic health plan that at least provides some form of protection for themselves and their children. It is not uncommon for some drug or other health treatments to cost in the thousands of dollars per year. Don’t kid yourself that our so-called public health system will cover the cost. Do you want to gamble that you will never need this coverage?

    An emergency fund of a thousand dollars doesn’t go too far when it comes to health expenses. If you want to self-insure catastrophic health coverage, ten to twenty thousand might be more appropriate.

    Expect the best, and then mitigate the risk associated with the worst.

  6. Anjo,

    I was assuming in the above post that people had work coverage hence the extra coverage would be useless. If you don’t have it, then you do likely need more than just the $1000 fund.

    Tim

  7. Tim, in that case agree that it would be silly for folks to consider additional (redundant) health insurance. Emergency fund would suffice.

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