Why Would I Buy Life Insurance For My Child?

Child Life Insurance

Why Would I Buy Life Insurance For My Child?

When the topic of life insurance for a child is brought up with a parent, at first it is almost an uncomfortable discussion. They seem to feel as though a life insurance policy on their child would create a situation where they would profit off of the death of their child. I personally felt the same way when my first insurance agent brought the topic up with me and my wife, many years ago. However, to view life insurance as a profit making situation is the wrong way to view all life insurance to begin with. Life insurance is not meant to be purchased to make money off of the death of a loved one, only to ease a financial burden when a death arises.

With the average cost of a funeral near ten thousand dollars, and sometimes even more, the last thing you would want to do in a time of tragedy is figure out where you are going to come up with money for a funeral. Some people even find themselves going into debt if they don't have the money. It would be nice to take as much time as you wanted to grieve, without money being an option.

Guaranteed Insurability For Life

A person is usually their healthiest when they are their youngest. Purchasing a permanent life insurance policy would ensure that the child has guaranteed insurance for life. This is a huge benefit. No matter what ailments or disease may occur in the future, as long as the premiums are paid, the child will continue to have life insurance.

High Cash Value Life Insurance

Purchasing a policy such as Indexed Universal Life (IUL) could set the child up with a significant amount of cash for their future. A male, age 0, with a $900 premium per year, for 10 years would provide the child with a significant amount of money for their future. They would be able to use $20,000 at age 30 as a down payment on a home, take out $15,000 to help their child with college and then take out $30,000 per year from age 65 to 100 for retirement. The cash taken from the policy would be Tax-Free and all from a $9,000 investment that started at age 0. The child would have received $1,190,000 in Tax-Free money and still maintain a death benefit for his family of $3,516,298. Imagine if instead of $900 per year, it was $1,800 or more!

This cash accumulation growth alone makes life insurance a great idea for children! Contact a qualified insurance professional with Family First Life to discuss what options are available for you.