From the moment our children are born, we want to protect them as fiercely as possible. We never want to think of the possibility that we will outlive them. Therefore, the concept of holding life insurance on our children may be a reminder of every parents’ worst nightmare. Yet, life insurance can help parents still give their children the lives they had planned for them, even if a parent were to pass away. Before you decide whether to insure your child, you should learn the benefits. You may find it is more beneficial than frightening to maintain a life insurance policy for your child.
Is it Costly to Hold Life Insurance Coverage for my Child?
In general terms, the cost of a life insurance policy depends on several factors. The insurance company looks at the risk involved in providing insurance for an individual. The risk is based on health and age. The healthier and younger a person is, the less costly an insurance policy is.
Therefore, children are very inexpensive to insure. Unless your child has a severe health issue, your child is an extremely low risk to an insurance company. This means that you can obtain up to hundreds of thousands of dollars of coverage for a low premium.
Even if your child has a severe health issue, their policy can be affordable to maintain. Typically, a young child does not need to maintain a large insurance policy. The lower the benefit and the child’s age, the lower the premium than a policy on an unhealthy adult.
How can I Purchase Life Insurance for my Child?
There are several ways in which you can purchase life insurance policies for your children. First, you can purchase a term-life insurance policy for your child. This policy covers your child in the event of death up to the term year you paid for. Term years come in amounts of 10, 20, and 30 years.
You may also purchase a whole life/permanent life – policy. This policy covers your child for life with the additional benefit of the tax advantaged growth of the cash value within the policy. Your child may be able to use that money in the future for things like post-secondary education, purchasing a car, their first house or paying for other future expenses. This type of policy allows your child to have a built-in savings plan and a very low premium for insurance if they choose to maintain the policy in adulthood.
Alternatively, if you do not want to purchase a term life nor a whole life policy for your child, there are other options to cover them. If you work for a corporation that offers its employees medical benefits, you should be able to add a rider to your life insurance policy to cover your children. A rider on your employer sponsored medical benefits is likely the least expensive option. The only downside to this method is if you are ever fired, laid off, or quit the company, you lose all the life insurance benefits you had with that company. Sometimes, you might be able to contact the life insurance provider, and get some of the coverage continued. But there are no guarantees.
Does Purchasing Life Insurance for my Child Provide a Guarantee of Insurability?
As an adult, you understand that life happens. People get sick and develop ailments or health concerns that put them in a high-risk category. People also have accidents or take jobs that are considered too risky for insurance companies.
Therefore, purchasing a life insurance policy for them guarantees they are insurable throughout their life. If you purchase a whole life or variable life insurance policy for them at birth, they will at least have that policy to rely on if they become uninsurable as an adult.
Should I Insure my Children Even if I Don’t Depend on Them Financially?
As an adult, life insurance is about providing financial security to your loved ones in the event of your death. Your loved ones depend on you to keep the household together and operating smoothly. Without you, a financial burden will undoubtedly follow.
A child is not a financial contributor to a household. However, the loss of a child can be a financial hardship for any family. When a child becomes critically ill or dies, the family suffers. Family members must take time away from work to care for their sick child or to grieve the loss of the child. Grieving for the loss of a child can require years of therapy and can be crippling. It can send any parent into a downward spiral that can take months or years to overcome.
Therefore, maintaining insurance on your child will help you, as the parent, take the time you need to grieve the horrific loss and move forward.
Can my Child use the Money in an Insurance Policy for School?
A whole life insurance policy for your child can be an added piece to your child’s education saving plan.
If you have made all the premium payments and reinvested the dividends, your child may have a sizeable amount of cash value that they can use to supplement their educations savings fund to reduce the need to take on large amounts of student loans.
The life insurance experts at Hometown Life Insurance can help you determine the best type of policy to help your children achieve their dreams.
How do I Obtain More Information About Insurance for my Children?
Although life insurance for your child may be difficult to think or talk about, putting proper protection into place ensures that you won’t have to deal with financial hardship at an already difficult time. In addition, there are plenty of beneficial properties to a permanent life insurance policy that your child can take advantage of in the future. Our team of licensed professionals at Hometown Life Insurance are happy to answer your questions and help you find the right coverage for you and each member of your family.
