Should You Buy a Whole Life Insurance Policy for Your Child?
If you've had a baby, then you've probably received all kinds of information about life insurance. Many people think getting a life insurance policy on a child is distasteful, however, there are some reasons to buy a whole life policy for your child.
Using a Whole Life Insurance Policy as a Savings Plan
A whole life insurance plan is considered by some to be a type of savings plan. As you pay the premiums, the amount of the policy's cash value will increase. The cash value of this policy can be cashed out or borrowed against.
This cash value can be used by your child in the future. The policy can be used to finance the education or help to put a down payment on a home. By purchasing a whole life policy, you can not only protect your child with life insurance, you can also provide them the cash they may need in the future.
The Policy Will Continue If the Premiums Are Paid
With a whole life policy, the premiums will remain the same, as long as they are paid. If you have a term insurance policy, you know that as you get older the premiums increase. In some cases, your child may not be able to get a term life insurance policy when they get older.
Many insurance companies allow you to set up an automatic payment plan. By having the money automatically withdrawn from your credit card or checking account you can ensure the insurance policy does not lapse, due to nonpayment.
The Policy Will Keep Your Child Insured as an AdultSome people have a difficult time getting life insurance because of health issues or because of their lifestyle. So, if your child is ill or decides they want to race motorcycles for a living, you can ensure they have some reasonably priced life insurance.
The premiums for certain adult life insurance policies are high. This often leads to some people being uninsured or underinsured when it comes to their life insurance. By purchasing a whole life policy now, you can ensure your child is able to have insurance as an adult.
The Policy Will Be There If You Need it
No one wants to think about the death of a child. However, as a parent, you need to realize that death is always a possibility. It may be an illness or an accident. If your child passes, insurance will help you to pay for the cost of a funeral.
You don't need to buy a large policy for your child. In fact, the policy should not be more than the cost of a burial. Buying insurance for a child is not about financial stability like it would be for an adult. Instead, the insurance you buy is there to cover burial expense if needed. And if not, it will be in place to offer your child life insurance protection as an adult and to build a cash value they can use when they need it.