Should I Buy Life Insurance For My Child?
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 dont 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. Lets 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 whats best for your family.
Buy life insurance for yourself first. Parents, who dont 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 youve neglected getting a policy for yourself just doesnt make sense.
Some people would argue that theyre 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 wouldnt mind receiving financial compensation for the loss of a childwho doesnt mind a little extra cash?
Remember, buying life insurance purely as an investment tool, is not such a great idea. If youre 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 theres 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 youre buying term, or for a lifetime if youre buying a whole life policy. For some policies youll pay less than $1.00 on the first months 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 youre 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. Youre more likely to find the best deals on these sites since they represent hundreds of life insurance companies and thousands of policies. Youll be able to compare life insurance rates, products and financial ratings of each company.
Should you buy life insurance for your child? Its up to you! Its a personal decision that you need to make as parents for you and your children. Consider the above and decide whats best for your situation.
by: Denise Mancini Ultimately try and keep the Right woman. Meet and keep the right woman is one of the approaches towards a good life Malaysia Tour Packages - Experience Treasury Notable for Life by:Toni Steave Between life and death, you pass your life looking for a meaning! Let Jack Rogers Put Some Serious Style In Your Life Life Insurance Plans: Traditional Vs. Modern Free Gas And Free Groceries For Life-learn The Secret Today Life Insurance Is An Important Decision To Make Early In Life Disability And Equality Training- Redefining Life For Disabled Give Your Doggy A Companion For Life! How To Extend Life Of The Rubber And Plastic Merchandise Spiritual Awareness And Avoiding The Slippery Slopes In Life Why Are We Erratic When It Comes To A Fitness Lifestyle? Learn How To Change Your Life: Weight Loss Tips And Tricks To Help You Get The Weight Off