Why is Child's life insurance a good idea?

One of the most important questions to ask. 

Why would I insist on a life insurance policy for my child?

If you are looking at insurance for just the death benefits, then it can seem cold to consider insuring a child. Most are comfortable with the illusion that kids do not die in America. However, when you take a deeper look at it then you understand how important it is to carry a policy. It's our job as parents to protect and guide our children through the world. 

Life insurance is not so much as looking at what happens if they die. It is what happens when they live. Are you setting your child up with a future? Are you working with developing a financial strategy that positions them in a better place than you started?

You may have heard about pre-existing conditions. Life insurance operates in a manner that if you develop and illness or condition then you may no longer qualify for an underwritten life insurance policy in the future. This can occur at any age; you go to secure a policy to cover the mortgage or your kid’s college and discover that you can no longer get a policy because of an uninsurable condition.  Every time that you switch jobs, you gamble that the next company has a group policy to cover your family’s needs. Setting up a independent policy provides flexibility to your child. 

#livinginsurance

This can be especially useful in situations where a disease like diabetes, cancer, strokes or heart problems run in a family.

Do you want to build a nest egg for your child?

Permanent life insurance policies build cash value over time. This makes such policies more expensive than term life insurance policies, which simply provide a death benefit. Permanent Life Insurance policies are a financial multi-tool. Insured under a permanent policy can borrow from the cash value for any reason without qualification. And while there is interest charged on the loan, there is no requirement to pay it back.

The younger the child is, the less expensive the life insurance policy is likely to be and the more time it will have to accumulate cash value. Nevertheless, for a parent hoping to provide help for a child to buy a house or repay student loans in the future, the cash value component of permanent life insurance can be an attractive feature.

Of course, devastating as it might be, there are expenses to consider in the loss of a child or any family member. The average funeral cost today runs between $7,000 and $9,000. Only 41% have enough to cover a $1000 emergency with savings let alone several thousand.  

What will their lives look like?

Funds from a policy can help with the unexpected expenses. Time away from work, grief counseling, etc. If you do not have significant financial means, the income (from the insurance policy) can offset the possibility of going into debt to pay for these various expenses. Spare your self the additional grief of passing a hat to pay for a funeral. 

Certainly, parents should consider the merits of making a decision that is right for their circumstances. Although contemplating the death of a child is horrific for most people, such shattering events do occur. Similarly, diseases and other health issues happen to young people, affecting their insurability for permanent life insurance purposes.

The bottom line is that permanent life insurance is one of several financial tools available to offset the bad things that occur in our lives and businesses. Permanent life insurance with a guaranteed insurability option, may provide a financial cushion for children well into their adult years.

We have been helping people with health and life insurance options for years in Central Washington. You can find more information at our web page or facebook page. If you want to see some options then take a look at our life insurance exchange. We wanted to provide our neighbors with variety of options. If you have any questions then do not hesitate to contact Suzie and Matt.