subject: Why Buy Children's Life Insurance? [print this page] When you have a young child or baby in the house, buying that young child life insurance may be not be on your mind. If you have just become a new parent or grandparent, you may consider getting a policy on your own life to provide for the child in case anything happens to you. But you cannot see any reason why you would need to get a policy on the child or baby.
Most of the time adults consider purchasing life insurance policies to help insure that their family is secure in case they pass away. But a policy may benefit the children in the families too.
Premiums for kids are really cheap! You can lock in low rates now that the child can enjoy forever. Even though the baby may not really need a policy now, he or she will probably want one in a few decades.
Another feature that may help your child is an option to buy a larger policy at some later date. This feature, if included, may allow them to get their own adult policy without having to answer health questions. This can provide for even more future security.
Some cash value policies can be paid up over a period of 10 or 20 years. A policy purchased now, and then paid up by the time the child is an adult, can be a gift of permanent security. Some policies do grow a cash value over time. Some people even use these policies as insurance, and as a sort of savings account. By making small premium payments over time, parents or grandparents may actually be able to use a policy like this to help build a fund for the future.
There are a couple of different ways to cover kids or babies.
You may just choose to take the simple route. This would be a child rider (option) that could be put on your own policy. These riders may end when the child is an adult. It is useful to find one that will allow the child to convert that rider into their own life insurance when they grow up. This gives you the advantage of cheap coverage now and guaranteed coverage later.
You can also purchase a policy on the child. This can have some advantages too. It is helpful if you want to buy cash value policies (like whole or universal life) which will actually grow as an asset. Many people have purchased policies on children to help cover them, but also to provide a fund for education or other long term goals.
Be sure and consider all of your options before you purchase a policy.
Be sure and compare policies and options before you purchase anything. This is a long term deal, and you want to make sure you make a choice you will be happy with.
by: Mark Bradshaw.
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