The value of purchasing life insurance for a child is often a topic of debate and one that we help our clients evaluate on a regular basis.

The first thing we take care to point out is that statistically speaking, the odds of a juvenile dying are very slim. The next thing we establish is whether the parent has all of the other fundamental measures in place to best protect their children against greater risks.gbia juvenilelifeinsurance

From a prudent investment perspective, it makes sense to ensure parents have adequate emergency savings in place, evaluate whether the parents carry adequate insurance coverage for themselves and that funding to their retirement and child's college savings is appropriate. If these financial planning basics have been met, we take a closer look at the benefits of purchasing life insurance for a child.

In some cases, it may be best to add the child's coverage as a rider on the parent's policy, but one of the main reasons it might make sense to consider purchasing permanent life insurance for your child is to protect their future insurability. When considering a whole life insurance policy for a child, these are among the other benefits to consider:

  • Premiums on children's whole life insurance are typically very affordable.
  • There are few health questions and no medical examination is required.
  • Rates never increase with age and the face amount may be increased in the future without evidence of insurability, guaranteeing the option to buy additional coverage, even as an adult, regardless of health
  • Benefits never decrease.
  • The policy accumulates a tax-deferred cash value over time.
  • Loans available from the cash value, which provides another funding avenue to consider in comparison to private student loan interest rates when the child reaches college age.

These policies are commonly purchased as a "gift" by parents, grandparents, or god parents, as the owner until the child reaches the minimum age of 18. To the adult child, this gift not only has the accumulated value, but the value of an established or "locked-in" premium for life. When ownership is reassigned to the adult child, they can choose to cash in the policy for its accumulated cash value or assume payment of the premiums to retain the policy at the original rates until they reach a maximum age of 121.

Great Bay Insurance Agency often utilised the Mutual of Omaha Children's Whole Life Insurance and Gerber Life products for our clients. To better understand whether a juvenile life insurance makes sense for you and your family; please contact us for a consultation at 603.743.4247.

It costs nothing for a conversation.

Your Great Bay Insurance Agent,

Sandy Salava

Let's Talk!

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