Life Insurance Policy For Child Why Buy Life Insurance For A Child
Below is a MRR and PLR article in category Finance -> subcategory Insurance.
Why Consider a Life Insurance Policy for Your Child?
Overview
While purchasing life insurance for a child might seem unusual at first, there are both pros and cons to consider. The primary goal of life insurance is to address insurable interest, meaning there must be a sensible reason for the purchase. It's essential that the income earners in a household are adequately insured first.
Key Considerations
Before insuring a child, ensure that the primary income providers have sufficient life insurance. Insurance companies often require a balanced ratio of coverage between parents and children. Once parents are adequately insured, buying life insurance for children can offer benefits.
Benefits of Life Insurance for Children
Term Riders
Many companies offer affordable term riders for children. These riders can later be converted to permanent policies when the child is between 18 and 21. This conversion is particularly valuable if health issues arise, making the child otherwise uninsurable.
Permanent Life Insurance
Parents may opt for permanent life insurance for their children, as it offers cash value accumulation over time. It is relatively inexpensive and can be a strategic choice once parents’ insurance needs are fulfilled.
Reasons to Buy Life Insurance for a Child
1. Protect Insurability
Securing life insurance early ensures that a child's insurability is protected, regardless of future health issues.
2. Cash Value Accumulation
Permanent life insurance can be funded to accumulate cash value, which can later support college education or other needs. Universal Life policies are excellent for this purpose.
3. Final Expenses
Covering potential final expenses is a fundamental reason for any life insurance.
Additionally, purchasing life insurance can educate children about financial responsibility, setting them up for a secure financial future.
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