5 Reasons why life insurance for kids makes sense
Posted in Family last updated on October 18, 2023
Life insurance for kids?!? To some, this may seem unnecessary or even a waste of money, but I am here to tell you that you need to take a second look at the topic. As a parent, I understand that even the thought of something bad happening to our little ones is daunting.
However, when it comes to getting life insurance on children, there is more to the subject. In this post, we will go over the top 5 reasons why life insurance for kids makes sense.
If you would like a personalized review of your situation or you have a question, please fill out the instant quote form or give us a call. We are here to help you navigate through the different options and select the one that it is best for you.
1. It is the most useful gift you can get
Just think about it… between birthday parties, Christmas and other occasions, our kids have more toys than we have the room for. The sad part is that they play with them for a few days and on to the next one. I know that a kid will not be very excited if you hand him or her a life insurance policy, but it will be a much more useful gift in a long term than the 5th Elsa doll.
It will be something that they can utilize for the rest of their lives. I know it is hard to believe it now, but one day they will have a family of their own and based on their situation, this could be the only life policy that they have to protect their kids. It is just the gift that keeps on giving.
2. Lock in their price
Think about it, the life insurance for a 1-year-old is times cheaper than let’s say a policy for a 31-year-old. For example, the $100,000 permanent policy for a 2-year-old would cost about $280 PER YEAR!! Whereas, a $100,000 permanent policy for a 32-year-old preferred non-tobacco male would cost close to $700 per year. This is a 250% increase that they will have for the rest of their lives.
Not to mention that this rate is for a healthy individual who doesn’t smoke. If we simply add cigarettes or nicotine use to the equation, the savings are even more astonishing. You can review your top 3 options for life insurance for children here.
Act now and lock in the best life insurance rate that your child or grandchild could ever get!
3. Lock in their health
In our opinion, this is one of the biggest advantages of getting life insurance on kids. The chances are they are healthy and you don’t have to worry about them qualifying. This may not be the case when they are in their 20s, 30s and etc. It breaks my heart when we are not able to help a client because of a pre-existing health condition such as epilepsy or cancer. Had their family purchased a life policy on them as kids, they at least would’ve had something to fall back to.
There are many financial experts that will argue that you might be financially better off to invest in something else and advised against life insurance for kids. But even they can’t argue with securing the best underwriting class for your child.
It is not only health that the life insurance companies are considering when reviewing a life insurance application. They are also looking into the applicant’s lifestyle, driving record, occupation. If you buy life insurance on your kid now, you don’t have to worry that he or she may have trouble getting life insurance, because he or she decided to become an airplane pilot, active military or end up with 2-3 speeding tickets.
If your child has a medical condition and you are not sure if he or she would qualify, we have options. Please do not hesitate to reach out to us for more information.
4. Life insurance for grown-up children
I know that when people hear life insurance for kids, they often think about policies on 5-6 years old. What about a policy on a young adult, who is about to start his or her life? In many cases, the parents will co-sign on a loan for their children to help them build their credit history. Whether is to purchase a car, get a better rate on a credit card, student loan or even lease of an apartment, parents become financially responsible if something were to happen to their children.
Having life insurance in a situation like that can takes care of the immediate liabilities that could happen. The parent can own the policy and with times transfer ownership to the child.
5. In case the unthinkable happens
This is the worst-case scenario and every parent’s worst nightmare. Unfortunately, losing a child is a reality many families are dealing with. It is probably the lowest point in their life and healing will take time. Sadly enough, they are faced with the financial part of it too.
The funeral expenses alone could be around $10,000 not to mention any medical bills. Many families may not have that amount available in their savings. Even if they do, the expenses will not stop there. It will be unrealistic to expect a parent to go back to work on Monday as if nothing happened. They will need time to process the new reality and try to find a way to keep living. This will be especially difficult if they are not able to afford to take some time off. Parents of 2 or more children will also need to make sure that their other kids are coping with the loss of a sibling.
Life insurance will allow you to take care of yourself and your family. It will provide you with the financial stability to decide how much time you need to heal and to afford treatment.
Purchasing life insurance for kids is a difficult topic to discuss, but avoiding the conversation will not make us any good. Call us or fill in the form for a free quote!
