Life Insurance for Children
While most adults recognize the importance of having life insurance for themselves, the idea of insuring the lives of their children is often overlooked. It is important, however, for parents to consider the possible life insurance needs of the whole family – including their children – when making their insurance decisions.
The life insurance needs of children will vary according to a number of factors, but it is still important to include the kids in any life insurance calculations. Children who earn any kind of income, whether it be in the exciting world of Hollywood movies, in television commercials or just in the family business, may need to have life insurance in place as protection for those earnings.
But even children who do not earn an income can benefit from life insurance, especially a whole life or universal life policy that provides an element of investment as well as a death benefit. Over time those policies can build up a very large cash balance, and that cash balance can be accessed even while the policyholder is still alive. The cash balance of a universal life or whole life policy can be used for any number of things, including funding college tuition, providing the down payment for a first home or even buying a car for the new driver.
In addition to these potential benefits, life insurance can provide peace of mind to the entire family. The peace of mind provided by life insurance is the same regardless of the age of the insured, and many families choose to carry coverage on all members of the family. Family life insurance policies can be a good way to accomplish this goal, but it is often more cost effective to buy separate policies for each child.
That is because the cost of life insurance for children can be extremely low. Children are very cheap to insure compared to adults, and that can make adding them to an existing policy, or buying them a life insurance policy of their own, quite a cost effective investment. When you consider the fact that whole life and universal life can provide a good return over many years it is easy to see why so many parents are choosing to extend their life insurance coverage to the youngest members of the family.
Of course it is still important to shop around as much as possible in order to get the best coverage at the lowest possible price. When comparing policies it is important to compare not only the premiums but the performance of any investment products that come bundled with the insurance. And of course it is essential to make sure that the life insurance companies under consideration have been highly rated by rating agencies like AM Best and Moodys. Dealing only with highly rated life insurance companies will reduce the chances of problems down the road and allow the children to enjoy the benefits of their policy for many years to come.