We all have hopes for our loved ones, and life insurance is one way of helping these dreams come true. Most of us know that it is a smart and responsible choice to purchase life insurance to provide for our family should the unexpected happen. However, when it comes to insuring children, many people do not see a reason. Why would you cover your kids if you already have life insurance yourself?
Insuring your children has a number of advantages. It can guarantee your child’s ability to get life insurance later in life if they become ill while still a minor. This is especially a concern for families with a history of hereditary disease. Early insuring also allows you to lock in to a low rate than may be available if your child were to wait until adulthood to purchase. Many people also choose life insurance as a way to cover costly funeral expenses or lost wages in the event of a tragic loss of life. It can also be an excellent investment in your child’s future that he or she could use for education, to help buy a home, or to start a business.
What Kind of Insurance is Right for Me?
At Lane’s, our usual advice is to only buy the insurance you need. Consider your goals for your family and take a realistic look at your finances. If your primary concern is being able to afford a funeral and allow yourself time to grieve the loss of your child, a term policy might be best. You could purchase one for a ten or twenty-year term, and if you or your child choose to convert it to a permanent policy later, it could be done without requiring a medical exam. Term life policies do not have a cash value, so should not be considered as an investment.
Investing in Your Children’s Future
Parents, grandparents, and other family members sometimes opt to purchase universal life insurance as a gift. Like a term policy, universal life insurance establishes insurability and locks in lower rates, but has the added benefit of being an excellent way to accumulate savings for your child that will not be taxed until your child withdraws the money. Or, you may also consider a universal plan with a set term, where you pay an agreed-upon premium for a period of ten or fifteen years, and then the policy is paid up for good. There are no further premiums, and your children will be insured for the rest their lives.
Most experts agree that a universal life policy for your child can be a sound investment that can go far towards supporting your child’s dreams, and like most investments, the real consideration is not if you should do it, but how much you can afford. That’s why the experts at Lane’s Insurance are here to help you assess your needs, so you can rest assured that you have made the right decision for your family.
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