Life Insurance For Children
If you want to buy insurance for your child or grandchild, there are a number of insurance companies that offer policies. An example of what you can expect would be a company which offers a single $300 premium that provides a range of coverage from age 0 to 23. This same policy can be converted in the child’s early 20’s allowing them to continue with permanent life insurance protection up to $100,000 regardless of future health considerations as long as premiums are paid. Yes, this means that no matter what their health situation may be, they are guaranteed life insurance coverage. This is just one option, there are many more out there for you to consider. You can buy cash-value policies for your children because of the insurability issue at this young age. Consider this, a $10,000 policy bought for a child can be increased to $280,000 worth of coverage as an adult without medical testing. It will benefit you to view what is being offered by the life insurance companies offering coverage for children.
From this vantage point you can see the wisdom of buying insurance for your young children, thus securing their potential to convert to permanent life insurance coverage in their early twenties without medical testing as long as premiums are paid. This offers them a safety net should they experience serious health problems as adults.
There is also a lot of debate by financial and insurance advisers as to the practicality of buying life insurance for children. There are some negatives that you should consider. Some say life insurance for children is an outdated product that has been replaced by more effective savings tools, such as 529 plans. Another argument is that since the purpose of insurance is to replace a loss of income, to sell insurance to cover someone who doesn’t have a job is wrong.
Maybe it is a means to set money aside for the future and to make sure that your child or grandchild will have insurance as an adult. This is worth considering because an illness later on in life could make him or her uninsurable.
There are several approaches to buying life insurance for children. You could buy a modest whole-life insurance or term policy along with opening 529 plans and setting up mutual funds. This would primarily make sure that they will always have some insurance and to accumulate some cash which would be available in case of an emergency. If you buy term insurance you want to make sure it is convertible in case the person should become uninsurable.
If there is a family history of health problems, such as diabetes or heart disease, which might make it difficult for your child to get insurance when in the prime income earning years, then it makes a lot of sense to buy a life insurance policy for him or her now. If the potential for health problems is there, you will need to buy a large amount of insurance, at least a million dollars worth.
There are those who consider purchasing life insurance on children inappropriate. They would say that unless your child is a super star, or somehow is worth a lot of money, it is an abuse, and selling life insurance for children is as contemptible as tobacco companies advertising cigarettes to children. The most contemptible thing is for an insurance agent to convince parents to buy insurance on their children when the parents are under insured themselves. Parents should not buy life insurance for their children until their own needs are completely covered.
There are many good reasons to buy life insurance for children as well as a lot of careless or substandard reasons. Don’t make a decision just because it’s what everyone else is doing or not doing. Look at all the choices available and do what makes the most sense for your family.
