A parent, grandparent, or legal guardian may want to purchase life insurance for a kid for a variety of reasons, including building a nest egg, ensuring coverage as an adult, or providing for end-of-life expenditures if the child happens to pass away unexpectedly. However, children’s life insurance is not for everyone, and before purchasing a policy, you should consult with a certified life insurance agent or company representative.
Who Should Consider Purchasing Children’s Life Insurance?
You Care About Your Child’s Future Insurability
Most policies for children are a type of whole life insurance, which provides coverage for a lifetime as long as premiums are paid on time.
Your child may be eligible to get additional coverage after they reach a particular age, regardless of their present health or career. If you want to ensure that your child is never denied a life insurance policy, it makes sense to purchase a starter policy for them when they are young.
You Wish to Secure Cheaper Premiums
In general, the younger the covered person, the lower the rates will be.
These cheap rates are locked in for policyholders at the time of purchase and will not be increased over time.
You’re Putting Money Aside for The Future.
Whole life insurance contracts include a savings component known as the cash value. This cash value accumulates over time at a fixed rate and can be borrowed against or paid out if the plan is surrendered. Some insurance firms promote these plans as a way to save for a child’s college education, while others advise against it. Consult a professional if you’re seeking advice on how to save for your child’s future.
Reasons Not to Buy Children’s Life Insurance
Death Benefits Are Modest
Unlike adult life insurance plans, which can pay up to $500,000 or more in death benefits, child life insurance normally pays $50,000 or less.
You Are Unable to Pay the Premium
In general, the premiums for children’s life insurance plans are cheaper than the premiums for adult policies. However, if you will have trouble paying premiums year after year, it’s best not to purchase such a policy.
