You may have been considering means, such as 529 plans, to save towards your kid’s future. However, you can also work toward this goal with life insurance for children.
Today, many Americans skip purchasing life insurance. However, while this practice may save you a little money now, it could cost you dearly in the future.
Fortunately, you’ve come to the right place to learn a bit more about the topic. Here, you’ll learn the basics of child life insurance and signing up for a policy.
Whole life insurance is a benefit that protects your child. However, they can also use it for college savings and to pay for expenses such as student loans in the future.
For a simple guide to child life insurance, continue reading.
What Is Child Life Insurance?
Child life insurance is very much like life insurance for adults. As a policyholder, you’d pay premiums for the coverage. Meanwhile, the policy will payout to a beneficiary.
With children, however, the beneficiary is typically you—the parent. In addition, the death benefit will pay out if the insured passes during the policy term.
However, in most instances, a life insurance plan for a child is a whole life policy. In other words, the policy will last for the entire lifetime of your child.
For example, you most likely recall seeing advertisements for Gerber Life Insurance. The company markets its insurance as a tool that you can use to pay for educational expenses.
Gerber Life Insurance also offers to lock in affordable premiums to protect your child. In addition, the policy also covers funeral expenses if your child should pass.
However, unless your child has a severe medical condition, the Gerber policy isn’t as competitive compared to other policies. Furthermore, a policy such as the Gerber offering comes with high administrative fees. It also provides a low rate of return.
Benefits of Life Insurance for Kids
You may want to consider another whole child life insurance plan. Still, you might wonder why your child would need a policy. After all, you’re the one who supports them financially.
A life insurance policy can help you to protect your child’s insurability. This benefit is a top reason parents buy life insurance policies for their children.
In the past, the idea of purchasing a life insurance policy for a child may have proved unthinkable. However, with the emergence of COVID-19, many parents are rethinking their views on this topic. Resultantly, parents or grandparents, just like you, are investing in insurance policies for kids to make sure that their children remain insurable.
The coronavirus doesn’t affect children with the same severity as adults. Still, anyone can contract COVID—and at nearly any age. But, for now, physicians have no idea how contracting the virus can lead to future health complications.
COVID-19 could result in a range of health problems. For example, parents who purchase life insurance now don’t want their children worrying about accessing life insurance coverage at a later date.
However, these aren’t the only reasons for investing in a life insurance policy for a child. A knowledgeable insurance broker can help you to review your options.
Buying Life Insurance for Your Child
As a parent, you may not want to put your children through the process of purchasing life insurance. However, it may please you to find out that buying life insurance for kids is much easier than purchasing one for an adult. The process is relatively fast, especially when comparing it to the time and effort it takes for adults to purchase a life insurance policy.
Typically, a medical exam is mandatory for an adult policy. However, with a child, you’d simply need to fill out the application. Therefore, your child will not have to submit to a medical exam.
For this reason, you can usually access insurance by filling out a single electronic form. Next, you’d just wait for the underwriter to complete the sign-up process.
Usually, you can buy children’s whole life insurance until a child reaches the age of 17 easily. Sometimes, however, an underwriter will establish a lower sign-up age. For example, Gerber life insurance limits the sign-up age to a maximum of 14 years old.
In either case, the policy will remain valid for the duration of your child’s life. The only thing you’ll need to do is make sure to pay the monthly premiums. Also, you can transfer the policy to your child at any time.
Insuring Your Child Under Extraordinary Circumstances
In some instances, it’s prudent to purchase life insurance for your child. For example, you may have a child with special needs. In this case, a life insurance policy will cover expenses if something unfortunate were to happen to your child.
However, there’s a more complicated issue with purchasing life insurance for a child with special needs. In this instance, you must think through whether to purchase life insurance to address the chance that you might outlive your child.
With this in mind, a life insurance policy for a child with special needs can prove beneficial for family members and caregivers. But, again, a knowledgeable life insurance broker can help you assess your options.
As a parent of a child with special needs, you may have to forego your career. You may have also not had the opportunity to invest sufficient money into retirement savings or pension accounts.
Likewise, your Social Security benefits may have also been adversely affected because you had to forgo work to care for your child. In this regard, a life insurance policy can help to replace wages and retirement benefits.
You’ll want a life insurance policy to cover funeral expenses in most instances. However, you can also use a child life insurance policy to make up for lost income opportunities.
Should I Buy Life Insurance for My Child?
It makes sense to buy a life insurance policy for a child in some cases. In this regard, you’ll need to consider your family history.
For example, your child might have an illness that would make it difficult for them to purchase a policy as an adult. Resultantly, it’s worth considering the idea of purchasing insurance for a child if they have a chronic illness that will worsen over time.
Insurance Policy Money Matters
You may wonder about the cost of child life insurance. The price for this kind of insurance plan will vary based on your child’s age.
It will also vary based on the size of the death benefit. Furthermore, the cost of life insurance differs based on when you’ll have paid the premiums fully.
At the same time, you may consider a life insurance policy as a way to build cash value. However, you shouldn’t consider a life insurance policy as the sole method of saving for college. Instead, you should also consider other alternatives, such as 529 plans or a savings account.
Why You Should Buy Life Insurance ASAP
The younger your child, the less a life insurance policy will cost. If you were to purchase a whole life policy, you could lock in the rate for the entire term of the purchase. The insurer will guarantee the price for the life of the policy.
However, the amount you pay is also affected by the type of life insurance coverage you purchase. Furthermore, your payment amount might change based on the payment schedule that you choose.
For example, you could choose a long-term life insurance policy that’s payable between the ages of 65 and 100 years old. The more you stretch out the payments, the lower your premiums will cost.
Alternatively, your insurer might offer you the option to pay off your policy in a certain number of years. For example, you can purchase an insurance policy with a 10-year and 20-year payment option.
However, this kind of policy will have higher premium payments. Still, you may want to consider this payment option if you want to turn over a paid-off policy to your child.
At this point, you most likely have a lot to think about if you’re considering purchasing a life insurance policy for your child. An experienced insurance broker can help you to sort through your options.
Learn the Cost of Securing Your Child’s Future Instantly
Now you know a bit more about child life insurance. What you need now is an insurer that you can trust to look out for your best interests.
Top Whole Life specializes in instant whole life quotes. We can help you to find the insurance that you need immediately. More importantly, we can provide you with the information you need to make an informed buying decision.
At Top Whole Life, we’ll help you compare the best life insurance plans for your needs. What’s more, we’ll make the insurance buying process simple.
Contact Top Whole Life today at (855) 946-5353 or connect with us online to learn more about the best of what life insurance companies have to offer.