Life insurance, on a 16 year old?

Question

my mom has had life insurance on me for a while. and a bit of money too. so i asked her why and she said

'because theres no way you'll out live me, why should i be left with and empty hole that i can fill with money?'

what the? is that odd? and she was serious too, is that mean?

Answer 1

Someone probably told her to buy life insurance on you a long time ago.  Heck Gerber even promoted life insurance for children, because there's a ton of profit in it.

Buying life insurance on someone as young as you is a bad investment, cause the odds of collecting are so minimal.  If she wants to fill an empty hole with money, make the hole your college fund.  

See what kind of insurance policy she bought.  It's probably term life insurance, with no cash value, which means you can probably just stop paying and it will end.  If it does have cash value, cash it out and put that money someplace else.

Yes, it's a little odd, but maybe not mean.  She may have thought she was doing the responsible thing.

Answer 2

Yes, it's odd - and not very smart.

Whatever she's paying on your life insurance, she'd do much better, investing it in a mutual fund.

Answer 3

About the only reason to purchase life insurance on a child is to (God forbid) bury them if they meet an untimely death.  The average funeral runs about $10,000 these days, a burden on any family.  Any amount greater than that is a waste of money.  Absolutely better to invest in a mutual fund account for the future.  Life insurance is never a good investment.  Buy term and for the difference in premium with other insurances, invest it in mutual funds.  I don't understand what your mother means by you not outliving her.  Does she think your policy will help you in some way?  Or her?  Good luck.

Answer 4

Many people have insurance on a child to cover burial expenses and/or so that the child can be guaranteed to have life insurance later in life should their health change and them not be able to get one.

The response is a little odd nonetheless.