Replacing lost income is a primary reason people buy life insurance. As a spouse or a parent, you want to be sure that if you die those who are dependent on you will have what they need financially to replace your income, cover outstanding debts, and have the readily available cash to pay for final medical bills and funeral expenses.
So while it's safe to say that most children don't have an income to replace, why should you consider buying a life insurance policy for a minor? The following are three advantages to purchasing permanent life insurance for your children while they are still young.
1. Life insurance for minors is affordable
Typically, the older you are the more expensive life insurance becomes. Take advantage of a minor's favorable age, health, and lifestyle. Input these parameters into the insurance underwriting equation and circle the result of low premiums for just pennies on the dollar.
You can lock in low childhood rates that won't ever increase, unless your child decides to raise the policy's coverage limit by taking advantage of a guaranteed insurability rider (if offered). This allows them to increase coverage at specific intervals (either age or policy year options) at an affordable price.
2. Insurance for kids
The future is unpredictable. Disability and chronic illness aren't something we can plan for. Pre-existing conditions and family health history can not only increase monthly insurance premiums, but also make it difficult to get coverage initially.
However, the future looks bright for insurability when you act early. A minor can benefit from having guaranteed coverage later in life regardless of unexpected health changes.
*Not all term policies or life insurance companies offer a conversion rider.
3. Life insurance gift
Birthdays before the age of 18 are filled with toys, games, and gadgets. These items have a shelf life. A life insurance policy is immune to both wear and disinterest. In fact, outgrowing a policy is impossible.
Getting your child started with a permanent life insurance policy can be an affordable and wise gift for your legacy, providing a safety net for your child, future son- or daughter-in-law, and your grandchildren.
Getting the life insurance coverage you need … today
As you age, it gets more expensive to buy life insurance. Moreover, certain health conditions can make premiums increase - or worse, make it difficult to qualify for life insurance coverage at all. For the same price of a weekly specialty coffee drink, you'd be surprised at how much term coverage you can easily afford. If you have named a minor child as beneficiary, we encourage you to contact your financial adviser or estate-planner to ensure the death benefit proceeds are properly protected and used for the child's benefit in your absence.
* As long as premiums are timely made.