In our last blog post, we discussed the details of purchasing a life insurance policy for someone else. We’d like to continue to discuss that process but with a more specific focus: purchasing life insurance for your child.
Most people purchase life insurance to cover the funeral and burial costs of a spouse, parent, or business partner. It is also purchased to replace lost income caused by the related figure’s death. But that’s not the only reasons to have life insurance.
Some parents find it beneficial to purchase a policy for their child early on to allow it to build cash value and to teach their child to be financially responsible. The cash value can be used later to help defray the costs of education or other necessities. It also ensures that their child will be properly covered in the event that they develop health problems later in life. According to a survey from Life Happens and LIMRA, approximately 20 percent of parents and grandparents have purchased coverage for children.
Aren’t They Too Young?
The first question we’d like to answer is one of the most common questions about purchasing life insurance for children: aren’t they too young for a life insurance policy? No. As we’ve stated in the past, there is no official “age limit” for life insurance.
The only restriction is that the child must have been born to be insured. You cannot preemptively purchase life insurance for a child prior to birth or conception. In general, most insurers will require that the child be at least a few days old before being insured. Be sure to ask your agent about any other specific requirements.
How Coverage Works
There are two main ways to purchase life insurance coverage for a child. If you are looking to purchase term life insurance for your child, that unfortunately cannot be done. If you desire more temporary coverage on a child, the only way to do so is to purchase a term life policy for yourself and your spouse and add a rider that will extend a smaller amount of coverage to other family members.
If you want long-term coverage or wish for your child to have a policy in his or her name, you will be able to purchase whole life insurance for a child. Because children are so young and far less likely to pass away in the near future, the premiums on policies for children are typically much lower, making this a wise financial decision. In addition, having a whole life policy from an early age will ensure that the child is always covered, and will negate the possibility of future medical issues making it difficult for the child to obtain coverage.
About National Catholic Society of Foresters
At National Catholic Society of Foresters, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. Sales from our financial services products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. Our portfolio is extensive, ranging from various life insurance policies to IRA’s to support your financial needs no matter what stage of life you’re in. For more information, contact our friendly experts today at (855) 804-7424.