MoneyMagpie

Oct 15

5 things you should know about buying life insurance for your child

Many of us turn to companies like Lincoln Heritage to purchase life insurance for ourselves to ensure our loved ones are financially protected in the event of our death. But, few of us seem to think about buying coverage for our children. Since most of us buy life insurance to protect our families financially, it stands to reason that fewer parents think about buying this type of insurance for a child that is not financially contributing to the household. But, did you know that buying a life insurance policy for each of your children can offer them significant financial advantages later in life beyond the basic death and burial benefits? So, let’s take a look at five things you need to know about buying life insurance for your kids and why it is a good idea, in no particular order.

 

Creating a Safety Net

Every parent wants to see their children grow up happy and healthy. Should the unthinkable happen, the insurance policy would cover funeral expenses, and will also give you the ability to take a little time off to care for any other children and yourselves while everyone grieves.

 

Buy the Right Coverage Amount

If you are going to buy a life insurance policy for each of your children, be sure you investigate the company you are interested in. You should not, however, buy the first policy you get in a mailer or an email. Be sure that price is not the only thing you look at, companies like Lincoln Heritage offer very specific coverages. They also explain in great detail what your coverages are, what your payments will be, the term of the policy, and whether or not your child will be able to convert to an adult policy. You should always look for a convertible policy.

 

What if You Don’t Want to Buy Your Child a Separate Policy?

If for any reason you should decide that you don’t want to buy each of your children their own policy, you may be able to add them as separate riders on your own life insurance policy. Be sure to talk to your agent or representative.

 

Building a Solid Foundation for Your Children

There are many ways to save money making use of the many tax-advantages for things like college or even retirement. But with the right life insurance policy, there is a cash value, one that your child may be able to borrow from for certain expenses. However, keep in mind that the money borrowed will be subtracted from the final death benefit. The money could be used for things like weddings, a down payment on their first home, or even to help purchase a car.

 

A Life Insurance Policy That Will Grow

By starting your child out with a “juvenile” policy, depending on the insurance you purchased, your child may be able to increase their coverage as they get older without the need for a physical. By starting your children out with a life insurance coverage at a young age, should their health suffer, they will be still be able to continue coverage. These are only a few examples of why you should consider buying your children their own life insurance policies from the very start.

 

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