Buying life insurance for your child is one of the biggest dilemma parents will face. To buy or not to buy? Most parents are confused and don"t know what to do.
To compound the dilemma, some life insurance agents will make parents feel guilty for not buying a child life insurance policy by telling them it is unloving. Let"s get this straight. You love your children, but the proof is not in buying them a life insurance policy. Whether you want to buy a child life insurance policy or not, the choice is totally up to you. Consider some of the pros and cons and decide what"s best for your family.
Buy life insurance for yourself first. Parents, who don"t have a life insurance policy, should not purchase life insurance for their children. Life insurance is meant to replace the income of an earning family member when that person dies unexpectedly. It provides the family with living expenses that allow the family to live in the same comfortable lifestyle they were used to. Life insurance is meant to protect the children and safeguard their future; not the other way around. Buying life insurance for your child when you"ve neglected getting a policy for yourself just doesn"t make sense.
Some people would argue that they"re not trying to make money for themselves out of a child life insurance policy. They want to buy a child policy only as an investment vehicle and to safeguard the interests of their child. There are others who say they wouldn"t mind receiving financial compensation for the loss of a child""who doesn"t mind a little extra cash?
Remember, buying life insurance purely as an investment tool, is not such a great idea. If you"re buying child life insurance as an investment for your children, you might want to re-consider and put your money in other tax-deferred avenues such as 529 plans or Education IRAs. Other savings tools such as mutual funds and annuities would also fetch you higher returns than the cash value of a life insurance policy.
Buy child life insurance to make sure your child is insurable. You can avoid the problem of uninsurability by buying your child a life insurance policy before the onset of any disease. This is especially helpful if you have a history of genetic disease in the family and there"s a good chance that your child might develop it as he/she grows older.
For others, it just makes sense to buy child life insurance and lock in cheap rates for the next 30 years if you"re buying term, or for a lifetime if you"re buying a whole life policy. For some policies you"ll pay less than $1.00 on the first month"s premium. Coverage is guaranteed for life. Future changes in age, health or occupation do not affect premiums. As long as premiums are paid on time, you can get up to $30,000 of coverage.
You must know however "" the odds of your child developing a disease that would make him uninsurable are very slim which is why child life insurance is not a very popular product. According to American Council of Life Insurers, only 15 percent of those under 18 have a child life insurance policy. Most of these are adult policies that include a child rider. The benefit is generally just enough to cover funeral expenses.
Child Life Insurance "" Whole or Term?
Term life insurance policies will be cheaper than whole life policies. Some financial experts will say go term "" you can buy lots of coverage for a small premium. Look for term policies that offer renewability option "" this means your child can renew the policy at the end of the term period, without having to go through a medical exam. If he/she has developed certain health conditions along the way, these would not be considered in the underwriting process at the time of renewal. The premiums would be based on age alone. Another option to look out for is a convertible option. This will allow you to convert the term life policy to whole life under certain stipulations.
Whole life would ensure your child is insured lifelong. Another advantage of whole life is that it allows you to adjust coverage without having to prove insurability. So a policy with $5,000 coverage could be converted to one with $250,000 coverage of, without having to undergo a medical exam. Once the whole life policy builds up enough cash value, you can also borrow against it, without having to show collateral. Parents may find this extra cash resource, especially when you"re in urgent need of cash! You can also dip into these funds to pay for college tuition.
Where to buy child life insurance?
Start with reliable aggregator websites that offer free life insurance quotes. You"re more likely to find the best deals on these sites since they represent hundreds of life insurance companies and thousands of policies. You"ll be able to compare life insurance rates, products and financial ratings of each company.
Should you buy life insurance for your child? It"s up to you! It"s a personal decision that you need to make as parents for you and your children. Consider the above and decide what"s best for your situation.
To compound the dilemma, some life insurance agents will make parents feel guilty for not buying a child life insurance policy by telling them it is unloving. Let"s get this straight. You love your children, but the proof is not in buying them a life insurance policy. Whether you want to buy a child life insurance policy or not, the choice is totally up to you. Consider some of the pros and cons and decide what"s best for your family.
Buy life insurance for yourself first. Parents, who don"t have a life insurance policy, should not purchase life insurance for their children. Life insurance is meant to replace the income of an earning family member when that person dies unexpectedly. It provides the family with living expenses that allow the family to live in the same comfortable lifestyle they were used to. Life insurance is meant to protect the children and safeguard their future; not the other way around. Buying life insurance for your child when you"ve neglected getting a policy for yourself just doesn"t make sense.
Some people would argue that they"re not trying to make money for themselves out of a child life insurance policy. They want to buy a child policy only as an investment vehicle and to safeguard the interests of their child. There are others who say they wouldn"t mind receiving financial compensation for the loss of a child""who doesn"t mind a little extra cash?
Remember, buying life insurance purely as an investment tool, is not such a great idea. If you"re buying child life insurance as an investment for your children, you might want to re-consider and put your money in other tax-deferred avenues such as 529 plans or Education IRAs. Other savings tools such as mutual funds and annuities would also fetch you higher returns than the cash value of a life insurance policy.
Buy child life insurance to make sure your child is insurable. You can avoid the problem of uninsurability by buying your child a life insurance policy before the onset of any disease. This is especially helpful if you have a history of genetic disease in the family and there"s a good chance that your child might develop it as he/she grows older.
For others, it just makes sense to buy child life insurance and lock in cheap rates for the next 30 years if you"re buying term, or for a lifetime if you"re buying a whole life policy. For some policies you"ll pay less than $1.00 on the first month"s premium. Coverage is guaranteed for life. Future changes in age, health or occupation do not affect premiums. As long as premiums are paid on time, you can get up to $30,000 of coverage.
You must know however "" the odds of your child developing a disease that would make him uninsurable are very slim which is why child life insurance is not a very popular product. According to American Council of Life Insurers, only 15 percent of those under 18 have a child life insurance policy. Most of these are adult policies that include a child rider. The benefit is generally just enough to cover funeral expenses.
Child Life Insurance "" Whole or Term?
Term life insurance policies will be cheaper than whole life policies. Some financial experts will say go term "" you can buy lots of coverage for a small premium. Look for term policies that offer renewability option "" this means your child can renew the policy at the end of the term period, without having to go through a medical exam. If he/she has developed certain health conditions along the way, these would not be considered in the underwriting process at the time of renewal. The premiums would be based on age alone. Another option to look out for is a convertible option. This will allow you to convert the term life policy to whole life under certain stipulations.
Whole life would ensure your child is insured lifelong. Another advantage of whole life is that it allows you to adjust coverage without having to prove insurability. So a policy with $5,000 coverage could be converted to one with $250,000 coverage of, without having to undergo a medical exam. Once the whole life policy builds up enough cash value, you can also borrow against it, without having to show collateral. Parents may find this extra cash resource, especially when you"re in urgent need of cash! You can also dip into these funds to pay for college tuition.
Where to buy child life insurance?
Start with reliable aggregator websites that offer free life insurance quotes. You"re more likely to find the best deals on these sites since they represent hundreds of life insurance companies and thousands of policies. You"ll be able to compare life insurance rates, products and financial ratings of each company.
Should you buy life insurance for your child? It"s up to you! It"s a personal decision that you need to make as parents for you and your children. Consider the above and decide what"s best for your situation.
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