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Eric Wells
Eric Wells

Should I Buy Life Insurance For My Child NEW!

Like a life insurance policy for an adult, a life insurance policy for a child is a contract with an insurance company. Premiums are paid (typically monthly or annually) in return for the promise that the insurance company will pay a death benefit if the child dies.

should i buy life insurance for my child

The younger your child is when you buy a policy, the cheaper it will be, Hoang says. With a whole life policy, the low rate you lock in at the time of purchase will be guaranteed for the life of the policy.

As you can see from the sample rates provided by Hoang below, premiums for a whole life policy are significantly lower for a child than an adult. The sample rates are from an AAA-rated life insurance company. Rates shown are for a male.

It provides funds for funeral expenses. The chances of a child dying are low, so funeral costs are not a good reason to buy life insurance on a child. But if that happens, a life insurance policy will provide funds to help cover the cost of final expenses. It also could allow the family to afford to take time off from work to mourn the loss of a child.

You might be able to use the cash value to cover premium payments for a while if the policy has built up enough cash value. But then there will be less cash value for your child if he or she needs it later in life.

Before buying life insurance for a child, make sure you have enough coverage for yourself. Protecting the financial well-being of loved ones takes priority. In fact, insurers usually require that parents have their own life insurance policies with at least as much coverage as they want to buy for a child as a prerequisite for insuring a child, Hoang says.

Life insurance can provide a safety net for loved ones who depend on you financially. But Life Happens CEO and President Faisa Stafford says she was prompted by the pandemic to buy life insurance policies for her two teen daughters. Of course, her daughters are the ones who depend on Stafford for support now. So why would they need insurance policies?

Working with a financial planner can help you decide whether life insurance for your kids is a good fit for your family and your overall financial situation. Also consider working with an independent insurance broker who works with several insurance companies and can help you find the best policy at the best rate.

If you have a family health history that could lead to a chronic, genetic or hereditary illness in your child, buying life insurance for them may be worthwhile, as the condition may affect their future insurability.

Life insurance policies for your children allow you to afford some time off work following the potential loss of a child and can also help you build cash value that grows tax-free to set your child up for life. Child life insurance policies can be an additional tax-deferral tool if used correctly.

Purchasing a life insurance policy for your children is often misunderstood. With this type of policy, you are the beneficiary, not your child. The death benefit from this policy allows you to take time off to grieve following a potential child loss.

With a child life insurance policy, you would receive money if your child dies. If you take out a life insurance policy for yourself, you can list your child as the beneficiary, which can help protect your child from financial burdens if something happens to you.

Child life insurance policy premiums tend to be low, costing just a few dollars a month. These rates are locked in for life, which means that purchasing life insurance for your child is a relatively low-cost way to plan for their financial future.

While many people purchase life insurance for their child to be part of a savings strategy, it also provides a financial cushion as a parent if you lose a child. This policy can help you cover final expenses and take time off to grieve.

While there are several benefits of purchasing a life insurance policy for your child, it may not be the best fit for everyone. There are often more efficient savings and investment vehicles available, and such a policy may not be necessary if you already have significant savings.

Before you purchase a life insurance policy for your child, you should ensure that you are insured. Some life insurance companies require that you be insured before you can buy coverage for your children. Plus, purchasing a life insurance policy for yourself can help ensure that your children are provided for if you die.

It depends. Purchasing a life insurance policy for your child can help to provide a financial cushion to process your loss if your child passes away. It can also be used as a savings and investment vehicle and help lock in a modest amount of insurance coverage for your child for life.

Are you wondering if life insurance for your children is a good idea? Child life insurance helps protect your family finances if your child were to pass away, and there is long-term value in it even if the policy is never used. Child life insurance can guarantee your child's future insurability and help them get a good start financially in the future.

Child life insurance is typically a form of whole life coverage that covers your child for their entire life (assuming premium payments are made). Child life insurance policies also accumulate cash value over time and pay a monetary benefit when the child passes away.

The child is the insured party on the policy, and the policyholder is generally a parent, legal guardian or grandparent. The beneficiary of the policy can be the policy holder or another person chosen by the individual who purchases the policy. Premium payments are the responsibility of the policyholder and can be made monthly, quarterly or annually, depending on the insurance provider.

Child life insurance could be a smart financial move. But first, you want to ensure you have adequate coverage so your family will be protected if you pass away. If you don't yet have a policy, now's a good time to explore your life insurance options.

Could we have saved more by just investing the money? Sure. And we do that too for the kids in their 529 accounts. But the stable cash value is a great side benefit that comes along with our decision to make sure our kids will have life insurance and the ability to get more when they need it.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries. Life and disability insurance, annuities, and life insurance with longterm care benefits are issued by The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM). Longterm care insurance is issued by Northwestern Long Term Care Insurance Company, Milwaukee, WI, (NLTC) a subsidiary of NM. Investment brokerage services are offered through Northwestern Mutual Investment Services, LLC (NMIS) a subsidiary of NM, brokerdealer, registered investment advisor, and member FINRA and SIPC. Investment advisory and trust services are offered through Northwestern Mutual Wealth Management Company (NMWMC), Milwaukee, WI, a subsidiary of NM and a federal savings bank. Products and services referenced are offered and sold only by appropriately appointed and licensed entities and financial advisors and professionals. Not all products and services are available in all states. Not all Northwestern Mutual representatives are advisors. Only those representatives with Advisor in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.

The cash value earned from a permanent* life policy (such as whole life, universal and variable life) can be withdrawn or borrowed against**, providing living benefits that can be used by your child as he or she gets older for many things such as:

There are a number of factors that can affect your child's future insurability. High blood pressure, diabetes, obesity and cancer are just a few of the many health complications that might prevent your child from being insured down the road. One of the primary benefits of purchasing a permanent life insurance policy when they are young is that they will always be covered regardless of their future health as long as required premiums are being paid.

Some life insurance policies for children come with an optional guaranteed insurability rider/endorsement that may be available for an additional cost. As your child grows into an adult, this rider allows them to buy additional life insurance above the face value of the current policy (on specific dates and in certain increments) regardless of his/her health status at the time. Usually, the older the child gets, the fewer dates the policy owner has to purchase more life insurance under the rider. In some instances, after a certain age, the rider may not be exercised.

Life insurance premiums for minors can be very cost effective. Buying life insurance for your child now could give you an opportunity to lock in that rate for the life of the policy. As long as the required premium is paid, the policy will stay in force.

Policies vary greatly from company to company. A life insurance professional can help you select the right policy type and optional policy riders so your child will get the most out of their policy - even when he or she is grown with a family of their own.

Plus, as an adult your child is guaranteed the option to buy additional coverage at our standard adult rates and acceptance is guaranteed regardless of health or occupation. The child life insurance you get today will ensure coverage that can last into adulthood.

So what better time to buy whole life insurance than when your child is young and healthy? Lock in the childhood rate now, and your child can keep the policy as an adult with the same monthly payment for life.

After your child turns 21 and becomes the policy owner, he or she can continue to pay the premiums and keep the policy. They will have life insurance coverage and can borrow against the cash value that has grown over the years if needed. Or, they can surrender the policy and receive the accumulated cash value to help get them started in life. 041b061a72


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