Child Life Insurance
Child life insurance is understood by very few parents. In fact, most parents fail to even give it a second thought. A parent may think: “Why insure my child?” The question is valid. Why insure a child when a child has no steady income and no dependents? Isn’t the point of life insurance to replace income that is lost and support a family that loses the sole breadwinner?
In order to truly understand child life insurance, and why your child should have it, you need to think about the little-known benefits of child life insurance.
Child life insurance benefits
- Lifetime protection. Child life insurance provides protection for your children for the entirety of their life. If your child receives a whole life insurance policy early, and then it’s later discovered that your child has a pre-existing medical condition, then the life insurance company can’t deny coverage to your child, or increase rates due to the new health condition.
- Lower costs. Whole life insurance for your child means indefinite rate protection. Lock in your child’s rates early and it could save them thousands upon thousands of dollars later in life!
- Start-up funds. Child life insurance may include a cash value account, which increases by as much as five times the moment they turn 21. Cash value accounts are an excellent tool for your children to use throughout their life, whether they want to use it as leverage for educational loans, mortgages, investments, or to increase their coverage later in life.
Types of life insurance for your child
Child’s life insurance comes typically in two forms of coverage, term and whole. Factors like your child’s age, your income and other investments will help you decide which one is right for you.
- Children’s term life - Very straight forward, you pay a fixed amount for a select duration of coverage, usually 10, 20, and 30 years, if anything happens to your child before then you receive the full policy amount.
- Children’s whole life - A little more complicated in that this coverage lasts the duration of the child’s life and not a specific time. You are the acting beneficiary until the child becomes an adult, then they take the policy over. These have great investment return values in the long run, but are sometimes less flexible than term life insurance plans.
It’s often much easier and cheaper to get a policy for a child than a young adult. Child Life Insurance is here to offer you helpful information on getting a policy for your child and connecting you with providers to the plans you need to cover your children.Is child life insurance a good value? It certainly can be, but it depends on the type of policy you get. The first step toward getting life insurance for your child is to decide what you are trying to accomplish with the policy. Do you just want to make sure that you would have money for a funeral and time off work to grieve if you were to lose your child? Or, do you want to pay more for life insurance that can be used as investment for your child and to insure they can get life insurance on their own after they grow up?If all you want is some assurance that you won’t have to worry about finances when you are already coping with the nightmare of losing your child, term life insurance is what you are looking for. Payments for child term life insurance are usually quite inexpensive, but after the term expires, the policy is over.
Whole life insurance policies for children cost more, but as long as you or your children keep paying premiums, they’ll never expire. So, if your child were to become chronically ill during childhood, he or she would still be able to continue the policy and have life insurance as an adult. Also, whole life policies build cash value over time. That means your child would be able to borrow against the policy later to pay for things like college, a wedding, or starting a career.
After you decide which type of child life insurance is right for your child, the final step is to compare quotes from different child life insurance companies. Comparing quotes will ensure that you get the best policy for your money.
If you need help shopping for child life insurance, our team of professional life insurance experts are here to help. You can request more information and you’ll be well on your way to finding the perfect child life insurance
Insuring a child is a confusing prospect for most people. Horrible as it is to think about setting a policy for a child who you hope lives for many years after you’ve died, the truth remains that you never know what could occur. Health insurance for a child can be a good investment simply because it costs so little and provides more than just the benefit of peace of mind.
Some argue that the key purpose of life insurance is to replace the income of wage-earner in the case of their death. Since a child is not making any income, many say, why pay an extra bill to have a child’s life insured? In the tragic situation of your child dying, what sort of dollar amount could you set on such a loss? You can’t, of course. You know that your child is priceless, but you also know that it will be difficult to continue working and earning your income after such a tragic loss.
Figuring out life insurance amounts for your child can be as simple as deciding how much coverage you want, whether you want term coverage or permanent coverage, and the health of your child. If your child is in good health, and the family history is good, then you do not require a very high death benefit, in which case the premium can be as little as a few hundred dollars a year.
One thing that few people know, however, is that insuring a child is a lot like building credit. Your child will have a better chance of securing good insurance rates later in life. As a teenager and a young adult, your child will have a better chance of getting the best benefits and the best rates for the rest of their life. Investing money into a permanent account at a young age will pay off in cash value later in life. The larger investment made at a young age will reduce the investment needed later in life.