Children’s life insurance was meant to be more of a starter policy. No one wants anything bad to happen to their children. That said, buying a life insurance policy for a child can set them up for a strong financial future. Child insurance policies offer more than just a simple death benefit. For a few dollars a month, parents can provide for their children’s future and guarantee they have insurance when they become adults.
Ensures Future Insurability
As a child age, their health may change, or they may want to explore different options regarding their life insurance. With a children’s life insurance policy, they already have an established policy. This will make it much easier for them to purchase a new adult policy when ready. A child’s policy will only cover them until they are 18 years old. At that time, they will have to transfer it to an adult policy, or they can cash it out to use as part of their college fund.
Saves for Their Financial Future
Most parents purchase a children’s life insurance policy to save a little money for their child’s future. Until the child turns 18, the parents pay a small premium. The premiums continue until the policy matures. If the child doesn’t want to transfer the policy over to an adult one, they may choose to cash it out and use the money. While the maturity value may not be excessive, it is a good sum for a young person to have in the bank.
Locks in Lower Premiums
When parents purchase a children’s life insurance policy, it locks in the price of the premiums. This means that the premiums can’t be increased during the policy term. In some cases, having this type of policy can guarantee a better premium on an adult policy. Locking in lower premiums will save you money throughout the policy’s life. Consistent payment of the premiums also shows a good credit history.
Ownership Can Be Transferred
The good thing about buying a child’s policy is that when the child reaches the age of 18 and the policy matures, the parents can transfer ownership of the policy to the child. The child can then convert the policy to a term life policy for an adult. A policy purchased when a child is just two or three weeks old can be a lifelong investment that a child can count on for many years.
Buying a child’s life insurance is not uncommon. It is one of the best things a parent can do for their child. Contact the agents at Unisource Insurance Associates to learn more about this type of policy and all of the advantages it has to offer. All of our agents have experience in life insurance and how the various types of policies will benefit your child and your family over time. We have all the answers you need to make an informed decision.