Life insurance is not the easiest subject to broach. It’s never fun to talk about our loved one’s death or even our own mortality, but it’s a part of life and a vital part in financial planning. It’s especially ominous to discuss life insurance policies for our own children. People against purchasing life insurance for children argue that its primary purpose is to cover the loss of income from a working adult. On the other hand, there are many reasons why the purchase of whole life insurance is important to consider. While we don’t live life preparing for the worst possible situations, most people will experience the loss of a loved one, and we need to prepare for that. Having the right type of life insurance can allow you to properly grieve the death of your loved one without having to worry about its financial aspect such as funeral expenses. Knowing that your family will not have to worry about money if something should happen is one of the best things you can do for them.
Listed below are just a few reasons why purchasing whole life insurance for your child is recommended.*
- Having the Peace of Mind that Your Child Will Always Be Insured
- As a parent, you want to ensure your child’s well-being and safety. If a tragedy strikes, whole life insurance coverage will give you one last thing to worry about during that difficult time. One of the primary benefits of having a whole life insurance policy for your child is that they will always be covered regardless of their future health. Heath problems that can commonly occur later on in life, such as high blood pressure, diabetes, obesity and cancer, can prevent your child from securing insurance later in life. Unlike term life insurance, a whole life insurance policy provides coverage for life, ensuring your peace of mind and security for your child.
- The Policy Can Build a Cash Value
- One of the perks of whole life insurance is that it not only provides death benefits, but it also builds cash value, which is based on how much the return on investment is worth.** If you invest in whole life insurance for your child while they are still young, by their late teens, the policy will have accrued enough money for you kid to eventually buy a car, finance their wedding, pay for their college education or even pay off their student loans. However, it is important to note that if you do decide to collect the accumulated cash and therefore surrender the policy, any money you receive over how much you paid into the policy can be taxed.***
- The Rate is Locked In
- Once you buy whole life insurance for your child at a young age, the premium will never change while you have that specific policy. This means that you will never have to pay more or less than the rate at which you paid for when you first purchased that certain policy as long as you continue paying the required premium.
You may not know what the future holds for your child, but you can still make sure they’re prepared. As part of a sound financial plan, insure your child for the future, whatever it may bring. Call us today to learn more.