Children change everything

Consider purchasing life insurance for a child or grandchild; it’s a financial gift that can last a lifetime

January 19, 2011 | Focus On | Number 2
By Lynette Taylor | FaithLife Financial

There is nothing like a new addition to the family to get parents and grandparents looking ahead to the future. Much of what lies ahead is unknown, but there are things like life insurance that can help secure your child’s financial future. In addition to having life insurance on each parent, in many cases insuring the life of a child can make sense by offering many long-term benefits for your child and the whole family.

  • Guaranteed insurance for life.Children that are healthy today are insurable today. Insuring children at a young age guarantees that they have insurance now and have the ability to get more insurance down the road, even if they develop health problems in the future. And most policies provide the opportunity to add a Guaranteed Purchase Option (GPO), which allows children to upgrade their insurance in the future without proof of good health.
  • Financial safety-net for future generations. Children who eventually have families of their own may have developed health issues as they grew up, and as a result are not able to obtain new insurance;  or a new policy may have a large premium due to health issues.
  • Cash values make it a gift that keeps on giving. Permanent policies can also give the child’s future family added financial flexibility; the cash value that accumulates in the policy can be used towards a down payment on a new home or as collateral for a loan to start up a business venture. Permanent policies also allow your child to lock in at very affordable rates and can be paid up in a limited number of years.
  • All grown up. Now what? Are your children now independent adults? It may be time to turn their life insurance policies—and the accompanying premiums—over to them. This is a great opportunity to have a conversation with your adult children about life insurance and why you purchased policies for them in the first place.
  • Give them something that really matters. Do your little ones really need more toys? Why not add up what you expect to spend this year on gifts, but, instead of wrapping up toys, consider putting the money to work in a whole life juvenile policy. A reputable life insurance representative can help explain the ins and outs of the policy and, if there are guaranteed purchase options, how they work.
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