GIVE THEM A HEAD START ON CHILDREN'S LIFE INSURANCE
Financial security and permanent protection
WHY CHILDREN'S LIFE INSURANCE?
At first, glance, getting life insurance on a child can seem unnecessary. After all, they are the youngest and, therefore, usually the healthiest among us. Plus, they don’t generate income or have anyone rely on them financially. It might be easy to dismiss the idea outright.
However, there are many valuable benefits that a child’s life insurance policy can bring them in both the short and long term:
Locking in / guaranteeing insurability
Maximizing the power of compound interest over time to generate cash value
Providing permanent life insurance coverage that will become invaluable when they have kids of their own
Creating generational wealth Provides protection in case of premature death or illness
HOW DOES LIFE INSURANCE FOR MINORS WORK?
Minors under 18 are ineligible for term life insurance coverage, so any policy written on the life of a minor will be a permanent policy of some kind.
Whole life and indexed universal life are the most common types of permanent life insurance used in children’s life insurance. Whole life is generally more conservative on the cash value side with more contractual guarantees. Indexed universal life, or IUL, comes with more cash value growth potential with fewer contractual guarantees.
Since the main goal of a life insurance policy for a child is usually to grow cash value, the premium is usually set at whatever amount the person setting up the policy is comfortable contributing on behalf of the child. This amount generally ranges from $25 to $250/mo, and the policy is designed based on that recurring monthly premium. This premium will be paid indefinitely, first by the parent or grandparent who is setting up the policy and then perhaps later by the adult child once they have reached an age that the policy owner is comfortable signing the policy over and allowing them to take ownership of it.
As the years pass and premiums are paid, the cash value grows within the policy and can be accessed later in life through withdrawals and policy loans for whatever the child (or, by then, a grown adult) may need it for. They are also protected with the permanent life insurance coverage that the policy simultaneously provides.
Could you give them a head start?
HOW DO I GET LIFE INSURANCE FOR MY CHILD?
The application process to get life insurance for a child is generally simpler and easier than for an adult. Typically, no medical exams or physicals are required, and the policy will be underwritten based on the child’s medical records.
READY TO LEARN MORE?
Schedule a 15-minute free consultation with a specialist