Life insurance is not just for elderly adults. It is also a helpful form of protection for children. If you are a parent and you do not have life insurance for your child, learn why this investment is one that you should seriously consider.
Protection Can be Lifelong
There is a fairly common misconception that policies purchased for children will either terminate once the child turns 21 or that the policy will need to be recertified once the child reaches adulthood. It is important to note that these scenarios are common, but they are not the standard.
If you invest in a whole life policy while your child is young, the policy will continue with your child throughout their entire life, as long as the premium payments continue. Additionally, should the child develop health issues as an adult, they will not be subject to a medical examination to maintain the policy.
It Could be a Savings Option
Did you know that some whole life insurance policies have a cash value? With these types of policies, a portion of the premiums paid on the policy is saved and separated by the insurance company. This separated amount is known as the cash value of the policy, which grows over time with interest.
Consider a policy with a 7% annual cash value growth rate where $4 of the policy premium was set aside for cash value, for instance. If the policy was purchased when the child was 1 year old, by the time the child turned 22, the cash value of the policy would be thousands of dollars. If you decide to cash in the policy at this point, it would be nice savings to pass down to the child.
Life Does Not Come with a Guarantee
It is much easier to look at life and assume that you have complete control and that everything will happen as you believe it should. However, the reality is that life does not come with any guarantees. Instead, unpredictable things can and do happen all the time.
For parents who are faced with the untimely and unexpected passing of their child, the last thing they need to add on to their grief is a financial burden. Life insurance for children ensures that finances are not something the family has to worry about.
If you have additional questions about purchasing life insurance for your child, speak with an agent who will be more than happy to answer any questions, and address any concerns you may have.
After we purchased our first home, we realized that it might be a good idea to evaluate our insurance coverage. Although we had purchased homeowners insurance before, we had never owned a policy as large as the one we would need for our new place. Also, our new home had a trampoline and a swimming pool, which made us worried about liability. To iron out the details, I decided to meet with our insurance agent. We talked about things like monthly premiums, coverage limits, and deductibles, and it was incredible to learn more about the terminology. This blog is designed to help you with the same types of questions.