Although children don’t have an income to replace, there are other reasons to purchase a life insurance policy for your child or grandchild. While no one wants to consider losing a child, the truth is that if this does happen, the cost of a funeral can add a financial burden to an already unbearable emotional burden. Fortunately, the vast majority of children live into adulthood; unfortunately, this is why many people believe that life insurance for children is not important or necessary. Purchasing insurance for children while they are young and healthy is the only way to guarantee they will have coverage at an affordable price long into the future.
The GrandStart policy is a whole life insurance policy that provides lifelong protection. It can be purchased for healthy children up to age 12. The policy offers $10,000 coverage for just $20 a year. At age 16, coverage automatically doubles to $20,000, with no increase in cost. At age 30, coverage automatically increases to $50,000 and premiums increase to standard rates. Click here to learn more.
LifeBuilder Plus is a term life insurance policy that lasts until the child turns 26, at which point it automatically converts to whole life or universal life insurance and can be increased to twice its original face value. At that time, a premium credit is applied to the new policy. It can be purchased for children up to age 21.
Children’s Term Rider
You may be able to add life insurance protection for your children to your life insurance policy with the Children’s Term Rider. Under the rider, your children are insured until they reach age 25. At that point, the rider offers a guaranteed conversion option, which means your child can purchase a policy for up to five times the coverage that he or she had under the rider without providing proof of insurability or a medical examination.
Although not specifically designed for children, permanent policies like whole life and universal life insurance can also be a good fit for a child. Classic Single Premium Whole Life is purchased with a lump-sum premium payment that lasts for the entire life of the policy. Classic Whole Life Destination is funded through level payments for 10 or 20 years. Because premium payments don’t continue indefinitely, these policies can serve as wonderful gifts.
Universal life insurance can also be a great option for a child. Its flexible premiums and death benefit may help accommodate whatever changes life may bring.