Parents have a very emotional and intimate bond with their children, a bond that can’t be put into words. The thought of something happening to them can send a parent into a turmoil of emotions so severe that they don’t even try thinking about the possibility of anything wrong happening to them let alone losing them.
The undying love of a parent for their child doesn’t let the thought of getting life insurance for their child cross their mind and hence they fail to see the potential benefits they can gain from it. There are many advantages to getting life insurance for kids. And the fact that life insurance for a child can only come in handy when you are met with the unfortunate incident of losing your child is not true at all.
Life insurance for your child can not only provide a potential safety net for your family if your child passes away, but it can also provide other benefits such as lower life insurance rates for your child when they reach adulthood. You can lock in a low rate, get lifetime coverage, protect your child’s future insurability, and build cash value by purchasing whole life insurance for children. Through this guide, you’ll get to know all about what child insurance is and its benefits.
So yes, this is an all-in-one guide. After reading this, you can instantly understand the basics of child life insurance and learn about the best life insurance for kids based on insurance policies that offer the best coverage benefits, price, ease of qualifying, future coverage options, and more.
What Is child life insurance?
A life insurance policy for a child, like an adult policy, is a contract with an insurance company. Premiums are paid (typically monthly or annually) in exchange for the insurance company’s promise to pay a death benefit if the child passes away.
In the case of an adult insurance policy, the policyholder is typically the insured person, the person who is covered by the policy. A child’s policy insures the child, but the policyholder is a parent, grandparent, or legal guardian. If the insured child dies, the policyholder can be the beneficiary of who receives a payout.
Children’s life insurance policies are typically whole life insurance policies, which provide lifelong coverage as long as premiums are paid. Premiums are usually guaranteed, which means they will not rise over time. Furthermore, a portion of the premium is used to accumulate cash value, which can be accessed at any time while the child is alive.
A child cannot be covered by a term insurance life policy, which provides coverage for a set number of years. However, if you purchase a term life insurance policy for yourself, you may be able to add a rider that will cover all of your children until they reach a certain age, at which point the coverage will most likely be converted to permanent policies for them at an additional cost
Why should you consider buying life insurance for your child?
Some may object to insurance for minors because the primary purpose of life insurance is to replace the income of a working adult. However, there are numerous other reasons why purchasing life insurance for your child may be a good idea for you.
Cash value as well as living benefits
The cash value of a permanent life policy (such as whole life, universal, or variable life) can be withdrawn or borrowed against, providing living benefits that your child can use as he or she grows older for a variety of purposes, including
• College tuition and expenses
• Financing a vehicle
• Paying for a wedding
• Collateral for loans