Ed Hinerman On Life Insurance

Why carry life insurance on your children?

Again, not a subject that most parents these days want to talk about, but it used to be very common. The truth is that the chance of a healthy child dying before adulthood is very small. So, in the minds of most loving parents is the thought, “why even think about it, let alone insure my child to help pay final expenses?”

Why did it used to be common? Back when I was a child my parents carried a small whole life policy, not because they were overly concerned with my premature death, but because they wanted to pass it on to me when I reached adulthood. The problem with the whole idea was that they carried a $1000 policy and when I grew up they passed on a $1000 policy. Inflation alone had rendered the size of the policy fairly useless.

 One of the best examples of a newer, better way to have children’s life insurance is structured something like this. You pay a very modest one tme payment. Your child is insured initially for say $5,000. At certain ages the amount increases to say $10,000 and the $15,000. It kind of keeps up with inflation in that sense. At your child’s age 23, they can convert the policy to a $100,000 universal life policy WITHOUT EVIDENCE OF INSURABILITY.

All in all a juvenile life insurance policy with much more meaningful benefits if there was an untimely death, and the real jewel is locking in a child’s insurability for adulthood with a meaningful amount of insurance. This policy is priced so well that, even if it didn’t offer any death benefit at all during childhood, the premium would be worth guaranteeing your child’s adult insurability.

Why carry life insurance on your children? Because it can be a significant gift when they reach adulthood!!!

1 comment February 2nd, 2007

Life insurance for children!

Now here’s a subject that 95% of parents don’t want to talk about. No parent wants to think that a child might die and therefore we don’t want to plan for that occurrence. I understand the emotional issue behind it, being a parent myself.

Children’s life insurance, sometimes called juvenile life insurance, can actually be a prudent way to give a child an inexpensive jump start on their own insurance portfolio when they become an adult.

There are policies out there that can provide small amounts of coverage, truly no more than burial policies, during a child’s growing years. Some increase incrementally as a child gets older. Usually at age 23 the child has the opportunity to convert their juvenile policy into a larger personal policy. The next thing I want to say is so important and is the key to the importance of a juvenile life insurance policy. That conversion DOES NOT REQUIRE EVIDENCE OF INSURABILITY!!! No matter what your child’s health is at the time, the company is bound to offer them the adult policy without any rating due to health problems.

These policies are very inexpensive if you buy them as stand alone policies. Do not add a child rider to your policy or buy a Gerber or Globe Life policy unless you just feel like paying more money than you need to for your children’s life insurance. If you have a child rider or a Gerber or Globe policy, seek out a more affordable alternative and cancel it once the new policy is in force.

Add comment January 26th, 2007