Like most important decisions, it’s beneficial to know as many details as possible to make the right choice. And when it comes to making choices for the betterment of your family, like if you should get your children’s life insurance, there are many components to consider. Thankfully, your local Lafayette life insurance agent at TSL will help you figure out if child life insurance is the right move for your family.
Purchasing life insurance for your children has many benefits, such as the child getting insurance coverage during the entirety of their life and the potential of locking in a low rate. Below we go into more detail on what to expect when insuring a child.
Life Insurance for Children
When you get life insurance for a child, it is typically a whole life insurance policy. This type of coverage should last throughout your child’s life, as long as the premiums are paid. Check out our blog post, The Three Types of Life Insurance, where we go into more detail about what to expect with whole life insurance.
Forbes Advisor mentions that you can generally buy life insurance for Children 17 or younger. The process of acquiring the child’s insurance policy is usually quicker than the process for an adult. One reason is that the child doesn’t have to go through a medical exam. You can also transfer the policy over to your child once they become an adult. Some Life policies make the child the owner at age 21. But you can also continue ownership if you choose to.
The Cost of Child Life Insurance
Life insurance will be cheaper the younger they are when you buy the policy. And the longer your payment schedule is, the lower the premiums will be. You can find coverage under 50,000 with locked-in premiums (which means the amount won’t increase). Whole life insurance can also serve as an investment vehicle because it builds cash value. The money is tax-deferred as it produces, which means you don’t have to pay taxes until you withdraw it.
Other Factors to Consider
You might want to consider life insurance for your child if you have a history of medical conditions in your family. Adding the coverage could provide comfort in knowing that your child will have coverage if they develop a medical condition in the future.
Child life insurance can also be helpful when the unfathomable happens. If you lose a child, there could be many costs involved that you were not prepared for. If the premiums have been paid on your child’s life insurance, you will get a payout in the event of their death.
Make sure you have a steady budget in place, and you know your financial situation. Do you have an emergency fund? Have you paid off debt? These are questions to have answered before getting life insurance coverage for your child. Keep in mind that there’s also the option of adding a child to your policy rather than buying them their coverage.
Also, when you’re deciding whether or not to buy your child’s life insurance, confirm that you have adequate coverage for yourself. You should make sure you’re being taken care of to take care of your loved ones. Contact TSL for a free consultation today.