Toys are easily broken and forgotten. Clothes are outgrown in a year or less. Don’t you wish you could give your children a gift that increases in value as they grow up? Consider buying juvenile life insurance for your kids. They may not need it now, but they’ll thank you later in life for giving them a financial head start while teaching them the value of protecting their family and their financial future.
Here are 3 ‘gifts’ for taking out an insurance for your child:
Assured coverage
When your child is insured at an early age, you guarantee your child of coverage even if they develop health conditions such as asthma, diabetes, or cancer. You don’t have to worry that your child will be denied coverage or be charged for more coverage should they develop chronic or long-term health problems. The premium for juvenile life insurance does not change even when your child’s health becomes compromised.
The same is true when your child gets into high-risk hobbies as an adult like sky diving, motor sports, or scuba diving. By purchasing juvenile life insurance, you ensure your child of future coverage even if they get into dangerous recreational activities.
Low rate locked in
The older the insured, the higher the premiums. But with juvenile life insurance you lock in a low rate which is often guaranteed for the duration of the policy. Which why it’s best to start a policy on a newborn child. While you will be paying premiums over a longer period the amount paid is still lower compared to taking out an insurance when your child is older.
Fund their future
Whole life insurance builds cash value over time. When you buy insurance for your child, a bigger portion goes to cash value because the premium is low and there’s more time for cash value to accumulate. Once it grows to a sizable amount, your child can tap into this for his or her college fund, pay off debt, buy their own house or even supplement their retirement income in years to come. To do this, one can make a partial withdrawal of the cash value; loan against the cash value or completely withdraw the cash value and surrender the policy.
How to buy juvenile life insurance
Unlike buying life insurance for adults, children are not required to take life insurance medical exam. Some companies offer quotes and online application requiring you to provide your child’s name, date of birth, and Social Security number.
In terms of cost, the amount you pay will be affected by the amount of coverage you buy and the payment schedule you choose. You may opt to pay for the policy throughout the life of your child or within a certain number of years. A longer payment schedule results in lower premium. If you want to turn over the policy to your child sooner, you may want to consider a shorter payment schedule albeit with a higher premium. On the other hand, some parents transfer policies to their children once they become adults so that they in turn can take over premium payments.
Performance > Cost
Cost should not be the main consideration when shopping for juvenile life insurance. Make sure to look into internal fees, as well as how much the cash value of the policy will grow based on a guaranteed rate of return.
To help find the right insurance for your child, call Mercado Global Insurance Brokers. We’ll be happy to assist you in choosing one of the best gifts you can give your child.
