Do children need life insurance?
Buying life insurance for children isn’t a topic that anyone wants to talk about. But unfortunately, the unthinkable can happen, regardless of your age. Losing a child can be heart-wrenching. But, knowing that you’re financially prepared for anything can allow you to have one less thing to worry about if the unimaginable occurs.
Why Consider Purchasing Life Insurance for Children?
There are several reasons why it can make sense to purchase life insurance on a child.
- Help ease the burden of burial costs
- Guaranteed insurability for life
For instance, buying life insurance for a child can assist you in the payment of final expenses. Today, the cost of an average funeral can be close to $10,000.
While you hope never to be faced with these expenses on a child, the unthinkable can occur – and if it does, life insurance can help you to ensure that you don’t have also to face financial hardship.
Depending on the situation, you may also have other uninsured expenses, like the cost of hospitalization, and additional costs that may be incurred if your child is in an accident, or if they suffered from a serious illness.
By purchasing whole life insurance on your child – which is a permanent form of coverage – there can be some additional benefits. For example, this type of coverage is designed to remain with a person throughout the remainder of their life.
So, by purchasing whole life insurance for your child now, you can essentially ensure that he or she can have coverage for the rest of their lifetime. Plus, you can also lock in a very affordable premium.
Besides, because whole life insurance builds cash value, your child will also have a type of tax-deferred savings. Over time, these funds from the policy can be borrowed or withdrawn, and used for any number of purposes, such as paying college tuition, purchasing a car, or even as the down payment on a home.
The Best Way to Obtain Child Life Insurance
While nothing can take away the pain of losing a child, knowing that they are covered by life insurance can help to ease the financial impact.
There are a couple of options when it comes to purchasing life insurance for children. If you already have a life insurance policy, you may be able to add a child’s insurance rider to the plan. Frequently, this can require less of a premium outlay than purchasing a separate policy for your son or daughter. In this case, though, you may only be able to obtain coverage up to a certain amount – typically in the neighborhood of $25,000. And, going this route may also only provide coverage until your child typically reaches age 18.
Another option for obtaining child life insurance is to purchase a whole life insurance policy. Whole life insurance for children can be extremely affordable due to their young age – and, the amount of the premium will typically be locked in for life. Also, the policy cannot be canceled by the insurance company, other than for the non-payment of premiums.
There are also certain strategies that can ensure that a child has life insurance for the remainder of their life – and that the premium will disappear in the future. One example of this is to purchase a whole life plan that will be paid up in 20 years. We have worked with both parents and grandparents who will provide these plans to their children or grandchildren, and it can be an ideal gift.
By owning whole life insurance, your child will also be assured that they are covered for the rest of their lives. This can be particularly beneficial if he or she contracts an adverse health issue in the future that would deem them to be uninsurable.
Unfortunately, if a child is diagnosed with a terminal illness, then it is too late to purchase life insurance. Our office will often receive calls from parents asking if we can insure their son or daughter who has recently contracted a certain illness – and we, unfortunately, can’t help them. But, by purchasing the right life insurance plan now, it may be the last plan that you – and they – will need to buy.
Factors to Consider When Getting Life Insurance on a Child
There are several factors to consider when shopping for a child’s life insurance coverage. One is that you will want to make sure that the policy you obtain will allow your child the right to purchase additional life insurance protection without having to prove evidence of insurability.
You will also want to be sure that the coverage you purchase comes from a reputable insurer that is strong and stable financially – and one that ideally specializes in life insurance for children.
One company that meets these criteria is Gerber Life Insurance Company. This company has been providing life insurance to children (and adults) for nearly 50 years. Gerber’s Grow-Up Plan is a whole life insurance policy that offers protection of between $5,000 and $50,000, along with a cash value that grows tax-deferred over time. Plus, when your child turns 18, the amount of the policy’s coverage will double.
There are actually many options available for protecting your child, and yourself, from the financial consequences that could occur in the future. We can help you to find the very best plan for you and your specific needs, as well a your budget. We work with more than 40 different life insurance carriers, so we can work with you in determining your options – both now and going forward.