Many parents and grandparents wonder if they should purchase a life insurance policy for their kids or grandkids. With all of the changes that children bring to a home, it may seem like the last thing to consider. But there can be some advantages to purchasing a policy when children are younger.
However, life insurance does have some uses. A policy can provide security now, and it can also provide future benefits to the new family member.
One thing to consider is that children’s rates are usually very low. If you purchase a policy today at low rates, you can guarantee those rates for the future.
Some children’s life insurance policies come with an option to purchase more coverage in the future without having to submit to underwriting. This is a good way to get some cheap coverage now, and then to make sure your child can buy more in the future when he or she grows up.
Some cash value policies can be paid up over a period of 10 or 20 years. A policy purchased now, and then paid up by the time the child is an adult, can be a gift of permanent security. Some policies do grow a cash value over time. Some people even use these policies as insurance, and as a sort of savings account. By making small premium payments over time, parents or grandparents may actually be able to use a policy like this to help build a fund for the future.
There are a couple of different ways to cover kids or babies.
One of the easiest things to do is to add your child to your own policy. This option will probably end when your child becomes an adult, but some may have an option to convert the option to a policy on the child before it expires This option is simple and inexpensive now. But it can guarantee coverage in the future.
Of course, you can also buy your child his or her own policy today. This is helpful if you choose to purchase a whole or universal life insurance policy that could grow a cash value. You are buy a policy today, but also helping with your future financial needs.
Compare before you buy!
As with any other life policies, the rates and terms of the contract will vary by location, age, and some other important factors. It is important to understand the policy you are purchasing, and also to shop around for the best deal. But an inexpensive children’s life insurance policy can provide a lifetime of security.