Whole Life Insurance for Children
The purchase of a whole life insurance policy for a child is a great gift idea. It offers both a financial head start for the child and financial protection for the parents. A Whole Life policy is the type of policy that accumulates cash value over time. Therefore, if a family member contributes a relatively small amount of money towards the purchase of a whole life policy on a toddler, someday the beneficiary could consider the matured policy to be a valued gift that provides protection.
Some experts say that child life insurance is not a sound financial move. They argue that it’s not necessary to purchase children’s life insurance because children are not assets that need protection. In other words, they argue that the only family member needing insurance is the financial provider. However, there are many reasons that those arguments are flawed.
For example, some unavoidable health problems could prevent your child from purchasing insurance when he or she is grown. Or in the event your child works in a hazardous occupation, engages in dangerous activities, or becomes uninsurable for any medical reason, his or her only option could be to pay for an expensive high-risk policy. Now try to visualize the fact that someday your small children will have their own families. Think what it will mean when they realize that the policy you had the foresight to purchase when they were children is now serving as protection for their own families.
By purchasing your child life insurance when they are young, you guarantee that he or she will always have life insurance coverage. Therefore, besides the obvious financial benefits of purchasing a children’s life insurance policy, your children will grow up knowing that your caring concern gave them a financial head start in life.
A Memorable Gift
By purchasing a whole life policy as an investment, you are purchasing a valuable gift for your child or grandchild. By sparking the interest and awareness of accruing money, a whole life policy can become a vehicle for teaching young children about the importance of financial responsibility. For example, a whole life insurance policy can help children to learn about the terminology of finances such as tax-deferred savings, as benefits are paid free of federal income tax. There are additional advantages that older children will gain by being the beneficiaries of children’s whole life insurance policies. For example, they may decide they could use the policy proceeds to help defray some of their future educational expenses or even to pay future policy premiums.
The purchase of an affordable children’s whole life insurance policy is worth considering as a gift idea for a new baby. First of all, when a child is very young, the premiums are very inexpensive. If the unthinkable occurs, and the child experiences any type of serious illness, the coverage will already be in place. Moreover, their benefits will never be reduced or canceled regardless of changes in age, health or occupation as long as the premiums are paid on time. Therefore, the gift you are giving your loved ones, while they are still too young to understand, will eventually become a gift of protection for their own families. In this way, insured young adults will realize tangible emotional and financial benefits.
A whole life insurance policy as a gift will never become obsolete, discarded or given to strangers, along with all the outgrown clothes and toys. As your children or grandchildren mature, they will gain the understanding that when you purchased a children’s whole life insurance policy for their benefit, you were demonstrating deep care and concern for their future welfare.
Indexed Universal Life insurance may be right for you if you’re looking for permanent life insurance that allows you flexibility in how you pay your premiums. For example, with Whole Life insurance, you pay a set amount each month. Universal Life insurance allows you to pay higher premium amounts when you want, so you can potentially increase your cash value.