Wednesday, June 15, 2022

Why Get Life Insurance For Your Child

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Child Life Insurance Pros


One of the biggest reasons that families obtain a child insurance policy is to guard against the child not being able to get a policy because of a future health condition.

A child life insurance plan can include a guaranteed coverage benefit to ensure the opportunity to purchase additional life insurance at certain ages and life events without proof of health or a medical exam required.

“I often recommend whole life for children so that the parent never has to worry about their child being declined for insurance in the future,” Shanbrom suggests. “I have had clients’ children develop a heart condition or cancer by ages 16 to 25 and, once diagnosed with said conditions, it is difficult to reapply for coverage or high amounts of coverage in the future.”

Another top reason to get a child life insurance policy is low cost.

“Since the cost of life insurance depends largely on age and health, purchasing a life policy when your child is young can lock in a low premium for the entire policy payment term if you choose term insurance or even for the child’s lifetime if you choose a whole life insurance policy,” says Friedlander.

A permanent life insurance policy also can accumulate cash value year after year. Cash value allows the policyholder to tap into a life insurance policy while alive.

Who Is Eligible To Buy Life Insurance For Minors

Not just anyone can buy a policy on a child. Life insurance companies will generally only allow the following people to purchase life insurance on a child:

  • Parent
  • Legal guardian

Also, adoptive parents are acceptable.

Insurance companies dont require consent from the child, so they only allow these individuals to purchase coverage on the child.

Here is another essential thing to note. Grandparents can buy life insurance for grandchildren without receiving consent from the childs parents.

Best For Affordability: Thrivent

At a cost of as low as $12 per month for $25,000 in coverage and fixed through the age of 70, Thrivent is best for affordability among whole life childrens insurance programs available today. In addition, with an A++ rating from AM Best, this non-profit is a strong choice for your childs or grandchilds life insurance policy.

  • Term policies are also available

  • At conversion, can purchase up to $1 million without proof of insurability

  • Must work through an agent

Thrivent’s overall low cost combined with financial strength and many member benefits make it the most affordable childrens life insurance policy available, with a monthly price of about $12 for $25,000 in coverage.

Thrivent started in business in 1902, offering insurance for only Lutherans. Only in 2014 did Thrivent open its policies to all Christians. 

Thrivent offers many standard life insurance benefits, including a fixed payment and a guaranteed cash benefit option that can be borrowed against as the insured ages. But its non-profit status offers many additional programs, including numerous financial planning tools and community outreach programs.

Thrivent is unavailable to a significant portion of the U.S. population who are not Christians and does not provide an online application or instant quotes.

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Life Insurance Brings More Value And Meaning Than Any Other Gift

Life is always busy with livelihood activities that make us not have much time to spend with our loved ones. At that time, considering, choosing and giving meaningful gifts is a good way to show care and love between family members, especially parents. Because for them, material gifts or money can never be compared to moments of peace with family, happiness to see the success of their children, and especially the care and attention from loved ones. . Giving parents the gift of life insurance is a practical way of spiritual encouragement, both meaningful to show affection and bring value to protect and take care of old age health for a long time.

Best For Versatility: Foresters Financial

Insurance for your child  should you get it?  SG Mummy ...

 Foresters Financial

Foresters Financial BrightChildren Whole Life offers many different options, including many riders, so its our top choice for versatility. As a membership-based insurer, some of the profits are shared with members in the form of various benefits, such as financial and legal counseling and community outreach programs members can sponsor and lead.

  • Early payout for certain terminal illnesses

  • Flexible timing for transfer of ownership

  • Membership-driven, not shareholder-driven

  • Must work through an agent to get a policy

  • No online application or quote process

  • An AM Best A rating

Foresters Financial offers the most innovative and versatile life insurance for children of any we looked at with flexible transfers of ownership. In business since 1874, Foresters Financial started with a mission to provide affordable insurance to working families and has continued with that mission through to today. 

Not only can you get coverage as high as $75,000, the highest of any childrens life insurance providers, but the cost is nearly as low as anything youll find. We particularly like some of the riders who allow payouts before death to help with the end of life expenses for certain eligible terminal illnesses, as well as extra coverage for death while on public transport or for accidents.

Read the full Foresters Financial review.

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What Type Of Life Insurance Is Available For Special Needs Children

Life insurance for a child can be ideal for children with special needs. That’s because a life insurance company doesnt typically require a medical exam for a childs life insurance policy and asks few health-related questions.

“For children with special needs who may be uninsurable as adults, child life insurance is incredibly important because, after the policy is written, there will never be a requirement to provide proof of insurability again so long as the policy remains in effect,” says Friedlander.

Basic Facts: State Farm Family Life Insurance

Talk to your agent to see which policy makes sense for you. Once you or your spouse is covered by either a State Farm Select Term or Whole Life insurance policy, just add one of these riders to help protect the rest of your family.

  • Select Term Rider Provides life insurance to age 95 with a premium that will remain level for 10, 20,or 30 years depending on the coverage you choose. The rider is available on both the insured and an additional insured and may be converted to a permanent policy if lifetime coverage is needed.1 Minimum coverage is $100,000.
  • Children’s Term Rider Add this to cover your children. Just one rider could provide up to $20,000 in life insurance coverage for each child in your family, including children yet to be born. So as your family grows, new children are covered once they reach 15 days old. Term coverage will terminate when the child reaches age 25 when it could be converted to permanent coverage. 1

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Life Insurance For Children: Should You Buy It

Your life insurance gives your family choices by providing the benefits to help pay off debts, to help meet housing payments and ongoing living expenses, to help fund college educations for your children or grandchildren, and much, much more.

2. Life insurance coverage protects your children. Life insurance beneficiaries receive a death benefit when the policyholder dies. Without life insurance, your children wont have the financial resources to cover the costs of their care. Life insurance money can be used to pay off your mortgage, enabling your children to stay in the family home.

Before you decide you cant afford insurance, though, take the next step. 5. Check Out Term Life Insurance Coverage. Over half a million dollars in life insurance coverage seems like a lot, but many people actually overestimate the actual costs of such insurance, especially for healthy, relatively young individuals.

Whether youre caring for young children or aging parents , you provide invaluable services that would be expensive to replace. Life insurance can help ensure the ones you leave behind get the care they need. 8. I dont have the time to get coverage.

The reasons why youre buying life insurance should drive your choice. Do you want to provide financially for your family after youre gone? If so, your spouse might be the best choice. If you want your company to continue, it might be your business partner. 2. Know your options.

How Much Coverage Should You Buy

Mothers Explain Why They Purchased Gerber Life Insurance for Their Children

The amount of life insurance you should get depends on your needs and unique situation.

“All possible factors and their likelihoods must be considered prior to determining a face amount on your policy,” Cicchelli recommends. “If your intention is purely to cover final funeral expenses, the face amount should reflect that. If there are to be considerations for grief counseling or any other possible outline costs, the face amount should reflect that. If investment possibilities are important, that opens an entirely different avenue of conversation.”

The bottom line? Purchase only whats necessary.

“Life insurance is not intended to make people rich. It is intended to transfer the risk of financial loss, including the financial loss of a child,” adds Cicchelli.

If you’re primarily concerned about paying for final expenses, Shanbrom advises coverage between $5,000 and $40,000. If you aim to replace lost income, a term policy for the exact replacement amount, typically starting at $50,000, might make more sense.

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What To Look For When Shopping For A Child Rider

1. Child EligibilityMost insurance companies child riders provide rider coverage for your children who are between the ages of 15 days and 18 years. A few companies extend this age up to 20 or 23 years old, but these adult children are required to be unmarried and financially dependent on you, the insured, at time of policy issue.

Some insurance companies will not offer rider coverage to children with special needs or other serious health conditions. If one of your children has a health issue that could result in denial of coverage, when you run quotes on Quotacy, choose Banner Life when applying. Banner Life does not require that you fill out a medical questionnaire about your children when buying a child rider. If youve already applied to a different company, talk with your Quotacy agent. He or she can help move your application over to Banner Life.

2. Coverage ExpirationMost insurance companies child riders provide coverage on your children until their 25th birthday. After age 25, the coverage provided by the rider expires unless you or your adult child convert the rider to a permanent policy.

Riders have different conversion expiration periods. Most require that the rider is converted by the childs 25th birthday, but this age can vary among the companies.

3. Coverage AmountMost insurance companies child riders provide coverage amounts of $10,000 per child, but options can range from $1,000 to $100,000 depending on the company.

Buying Life Insurance In Your 50s

Theres no other way to put it: Buying life insurance in your 50s will cost more. That said, if you have few assets and financial dependents who rely on your income, you shouldnt bypass coverage.

Research shows that most Americans significantly overestimate how much life insurance will cost, and were pretty sure coverage in your 50s would be one of those scenarios. A 20-year, $250,000 Haven Term policy would cost a 55-year-old woman in excellent health about $44.45 per month. The price of coverage comes in higher for a man of the same age and health at $68.25 per month.

While not inexpensive, if its providing peace of mind and necessary coverage, its probably worth it.

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What Is Childrens Life Insurance

Childrens Whole Life Insurance from American Family Life Insurance Company is protection that can last a lifetime. Parents or grandparents often take out a life insurance policy for children as a way to get their child started on securing their financial future. Getting them started early helps them lock in a lower premium rate and start building cash value.

Life Is Uncertain: Life Insurance Helps You Prepare For The Unexpected

Should You Get Life Insurance for Your Kids?

Life is unpredictable. Childrens whole life insurance provides greater peace of mind, knowing that youll have financial protection should the unthinkable occur. You might not depend on your child for income, but you will want to be prepared for final expenses and medical bills. You might want to take off time from work to take care of your family. Life insurance can help you focus on your loved ones, and give you one less thing to worry about during a difficult time.

Now you have 4 good reasons to buy life insurance for your child: to ensure your child will always be insured, lock in the childhood rate for life, build cash value your child can borrow from, and help protect your family for the unexpected.

The Gerber Life Grow-Up® Plan is a childrens whole life insurance policy that can be a valuable safeguard for you and your child. Learn more about the benefits of child life insurance or find a policy thats right for you by calling us at .

*Policy loan interest rate is 8%. Loans may impact cash value and death benefits.

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Life Insurance Proceeds In Your 40s Could Help Your Beneficiaries Pay:

  • The remainder of a mortgage that your partner couldnt pay off without your financial contribution
  • Make up for a gap in coverage because of increased earnings and a lower amount of coverage from when you were bringing home a smaller salary
  • Protect a stay-at-home mom or dad who solely relies on your income
  • Day-to-day childcare expenses, along with future child care expenses like extracurricular activities and college
  • Serve as a financial cushion to keep your family from tapping into savings to cover the bills
  • Medical bills or other final expenses

Choosing a policy with a shorter term or a lower level of coverage can make a significant impact on saving money while still getting ample coverage.

Why Purchase Life Insurance For Children

It’s never required for your children to have life insurance, but parents or grandparents will often purchase coverage to:

  • Cover costs associated with the child passing away
  • Ensure insurability of the child later in life
  • Give the child the gift of an investment with a fixed rate of growth

You can often save money by purchasing a joint life insurance policy for yourself and your spouse, but this is usually only available as permanent coverage. For a child’s life insurance, the reason you want coverage typically determines whether they should have their policy or be added-on to yours.

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Top Ten Reasons To Buy Life Insurance

You should definitely consider buying all or most of the 5 necessary types of insurance mentioned above. These are the most important insurance types that provide huge financial relief for very realistic scenarios. Outside of the 5 main types of insurance, you should think carefully before buying any additional insurance.

If you have a living spouse, children, or other family members who would need financial support if you were to unexpectedly pass away, you should consider purchasing a life insurance policy.

Nowadays, term insurance companies in India provide term insurance plans that offer coverage till 85 or 100 years. If you are the only breadwinner in your family and want to secure the future of the loved one’s post of your demise then you can consider buying a long-term term insurance plan.

Even if you earn six figures and buy $1 million in term life insurance coverage as a result, this amount could disappear in a hurry once you start thinking over all the liabilities it needs to cover.

Life Insurance What Is Life Insurance . ‘s life products are the most successfully selling products. Available options include a terminal illness rider, also called an accelerated death benefit, which allows the insured to withdraw 70% of the benefit due to having a terminal illness

Why Is Life Insurance On Children

Why Should I Get Life Insurance? (Life Insurance 101)

One of the primary benefits of having a life insurance policy for children is that they will always be covered regardless of their future health . Verify with any life insurance company that the policy type you will be buying states that your child will never be denied life insurance no matter what medical problems they face throughout their life.

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Confusion Abound With Life Insurance On Children Lets Get The Misinformation Out Of The Way

Many financial experts and planners make confusing statements about life insurance. We see this confusion more when you buy life insurance for your child.

The first one: many of the articles describe life insurance as an investment. Life insurance is not an investment. A mutual fund is an investment. A stock is an investment. Life insurance is risk protection. Lets get that out of the way.

A little bit later, we will describe the different types of life insurance available to children. One option is term life insurance. If you know anything about term life insurance, then you know that term life is NOT an investment. This is like saying your homeowners or auto insurance is an investment.

Sure, some types of life insurance contain cash value. But, its not an investment in the traditional sense.

The second part is that the experts suggest you should put that money elsewhere, like in a 529 college savings plan. We could not agree more! You should open and contribute a 529 plan for your children!

However, the experts seem to imply that the premium money you save will be much more than the value of life insurance. It is not. Lets provide an example.

A $50,000 whole life insurance policy on a newborn boy might cost $30 per month. Lets say, instead, you put that money into a 529 plan each month that earned 8% annually on average. How much do you think you will have in the account in 18 years when the boy is ready for college. Do you think it will be more than $50,000?

Covers Costs If The Worst Were To Happen

Losing a child can be extremely painful, and you may incur unexpected costs. Child life insurance policies pay out a lump sum in the event of a death, as long as the premiums are paid.

Pros: The payout can be used for expenses like burial costs or grief counseling. It can also help cover the costs of running a business if youre the owner and need to take time off, Bonneau says.

Cons: Its relatively uncommon for a child to die in the U.S. In 2018, the countrys infant mortality rate dropped to a historic low, according to the Centers for Disease Control and Prevention. Therefore, the risk of going without coverage may not outweigh the cost of the policy.

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The Future Debts Of My Children

When I bought life insurance on my children, another risk I wanted to avoid was co-signing on future loans for my kids, and then winding up on the hook for those debts if the unthinkable were to happen. Put another way, I wanted to be able to help my kids, and sign for those debts, without worrying that I might be unable to pay them in future, for the worst possible reason.

An example from my life inspired me. At 20 years old, I bought my first car, a beautiful, pearl-white Nissan Maxima. I had saved up $10,000 for a down payment, which was a real stretch for me in those days. Thanks to my earnings as a parking valet, I could easily afford the $157 monthly payment.

The problem was I had no credit history and no credit score, and so was declined for the loan. My grandfather ended up having to help by co-signing on the debt. I didnt realize it at the time, but had anything happened to me, it would have become the responsibility of my grandfather to continue paying the loan. In other words, it would have become his obligation to pay off.

That said, about a third of students don’t take on debt while getting a four-year degree, and that proportion rises for lesser degrees, according to the National Center for Education Statistics. And when students do get loans, it’s usually from the federal government which, unlike private lenders, does not require a co-signer.

Should You Buy Whole Life Insurance For Children

Does Your Child Need Life Insurance? Yes, Here

Some professionals say yes, you should, and some say no, you shouldnt.

Heres the truth.

Its entirely up to you! If you sleep better knowing your children/grandchildren are insured, then buy them a policy. If not, then dont.

Again, its totally up to you.

Insurance provides peace of mind. The question is, do you feel the peace of mind is worth the few bucks youll spend to get whole life insurance for your kids.

Only you can answer that.

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How Much Is Childrens Life Insurance

American Family Life Insurance Company offers three coverage levels: $25,000, $50,000 or $75,000, with 10 and 20-year payment options.

A 10-year payment option1 means a slightly higher premium, but you may be able to pay it off before your child ventures out on their own.

A 20-year payment option is fully paid for in 20 years, and the premiums are more affordable than the 10-year payment option.

Whichever option you choose, your premiums will never increase. And once the payments are done, the coverage is there forever. 2 Now thats peace of mind.

A DreamSecure Childrens Whole Life Insurance policy from American Family Life Insurance Company is protection that can change as your childs needs change. With the built-in Guaranteed Purchase Option Benefit additional coverage can be purchased on the insured with no additional medical exams. This coverage can be added at specific ages or when major life events take place, including marriage, becoming a parent or buying a house. This makes it easy to get the coverage they need at different ages and stages of life.

What Should She Do

So it appears that Arlene wants to do something for the future of her children and I can relate with that.  What can she do instead of purchasing whole life insurance?  Here is what I would do:

  • Start or maximize an education fund for the children.  In Canada, that would be an RESP, with the government adding 20% to your contribution up to $500.  In other words, if you contribute $2,500/child/year, then the government will add $500/child/year to your RESP account.  I would pick this option over whole life insurance for children any day of the week.  We opened a family RESP with TD using their e-Series index mutual funds.
  • Consider an informal in-trust account.  If the RESPs are maxed out, the next thing I would consider is to open an investment account on behalf of the children an informal in-trust account.  This account can be turned over to the child once they reach the age of majority, which could be used for life milestone expenses like a wedding, down payment on a first home, graduate studies, or even a dream trip. There are a few considerations with this account which can be read here.
  • It would cost Arlene and her spouse a total of $4,500/year for 20 years for a $100,000 death benefit that doesnt adjust to inflation and a high fee investment portfolio .

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    Life Insurance Is A Terrible Investment

    In case you’ve never read through my series on The Myths of Whole Life Insurance it is important that I point out that the returns on a whole life insurance policy are terrible. Often negative for a decade or two, they are only guaranteed to be about 2% over a lifetime and projected to be perhaps 3-5%. The smaller the policy the lower the return due to more of it being eaten up by administrative and insurance costs.

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