If you love your child, you should buy him a life insurance policy. Life insurance policies are designed to replace a wage-earner's income. If a parent dies, his life insurance policy will help to financially support the family. Children, however, do not earn an income. While the loss of a child is tragic, it does not create a financial burden the same way as the death of a working adult.
Insurance salesmen argue that a child's life insurance policy is a form of investment. Unlike term life insurance policies, which only pay out upon death, whole life insurance has an investment component. Part of the premium goes towards insuring against death, the rest is invested. The policy accrues value over time. The child can cash out the policy, or borrow money against it.
There are other ways of investing in your child's future than buying life insurance. For example, a 529 Plan helps you save for your child's college education. It's similar to a 401K. You and your family can make regular contributions to the child's account. You can deposit as much or as little as you want. The money will be invested in a mutual fund. Any income made from it will be tax-free. You can also deposit up to $2,000 a year in a Coverdell Education Savings Account. While the contributions are not tax-deductible, the interest is tax-free.
Another argument for buying child life insurance is to guarantee future insurability. This can be an issue if you have a family history of serious health problems which can make it difficult for the child to get an insurance policy in the future. If the child already has a policy, the insurer cannot cancel it simply because the child becomes ill. However, most child policies are cashed out long before such problems arise.
Insurance companies market child life insurance by appealing to parents' emotions. For most families, there is no financial reason for insuring the life of the child.