The coronavirus pandemic has prompted many parents to pay close attention to their children’s health and well-being, and for some, it has resulted in the purchasing of life insurance for their kids. And, although life insurance mainly acts as a safety net for family members who rely on you financially in the event of your death, there are many advantages to purchasing insurance for your children in particular.
In this article, you will find a list of long-term benefits you should keep in mind if you consider buying life insurance for children. They include but are not limited to guaranteed insurability, building cash value, providing funds for funeral expenses, affordability owning to a locked-in rate, and living benefits, such as college tuition, wedding expenses, financing a vehicle, etc. Continue reading to learn more about life insurance for children and make an informed decision.
If you purchase life insurance for your children when they are young, then there is no limit to how old they will be when they can apply for the policy. This means that you can apply for life insurance for your children at any time in the future without having to worry about their current health conditions. Moreover, even if they develop some health problems later in life, they still might qualify for life insurance coverage. If you want to educate yourself on this matter further, you can check this critical illness insurance guide.
Provide Funds for Funeral Expenses
Life insurance for your children will also give you peace of mind knowing that, in the event of your death, your children will not have to worry about the costs associated with your funeral. This is because your life insurance policy will pay out a lump sum of money to your beneficiaries to cover the costs of your funeral. Remember, life insurance proceeds are tax-free, so your child’s inheritance would not be affected.
The cost of purchasing life insurance for your children is relatively low since you can purchase it at any time in their lives. Moreover, there are no medical underwriting requirements if they are still healthy, which means that they have no health issues that might affect their eligibility for coverage. As a result, you can choose to purchase an amount that will provide financial security for your child.
When buying life insurance for your children, there is no need to change your premium rates if their age changes. For example, if you start paying premiums for them at the age of 20, then there is no need to make adjustments even if they turn 22 or 24 years old. You will continue to pay the same premium rate until the policy term ends.
However, if your child is not yet 18 years old but is getting ready to start college within the next year or the next few years, then you might consider increasing the amount of coverage to be able to cover his or her future education costs.
Life insurance for children can be used to provide cash benefits in the event of serious illnesses or injuries. So, even if they are young and healthy now, you can still apply for life insurance on their behalf and use the proceeds to pay for future medical expenses related to illnesses or injuries they might develop later in life.
One of the most popular living benefits is using life insurance for children to pay for their college tuition. If you stay on top of this expense by purchasing insurance coverage at an early age, then you will not have to worry about funding it that much when the time comes. Also, keep in mind that there are different types of life insurance for children available on the market today. So, make sure to read up on this topic and familiarize yourself with the different terms and benefits of each type before deciding on one.
Another popular living benefit is using life insurance for your children to pay for their wedding. Remember that you do not need to use the whole lump sum of money to pay for one specific expense, such as the wedding. Instead, you can use it to cover multiple future expenses, such as the honeymoon, the new home, and other wedding-related costs.
If you are thinking about buying life insurance for children but are having a hard time coming up with the down payment, then you can use the policy as collateral to secure a loan. This is because the amount you borrow will be based on the cash value of the policy. Alternatively, you can use life insurance as a source of last resort in case you need financial assistance. This is because the proceeds from a life insurance policy are available to you even if you have a bad credit history.
As you can see, there are many advantages to buying life insurance for young children. And, if you choose to purchase life insurance for your kids in the future, then consider getting coverage with a fixed rate that does not change over time so that you will not have to worry about adjusting your premium rates when they turn 18 years old. Furthermore, you should also consider purchasing individual term life insurance for them so that you can have more control over how much coverage you want to get in the event of your death.