Purchasing life insurance for children has many advantages, and is important in protecting their insurability at a young age.
Life insurance is generally purchased for final expenses and replacement income. Even though children do not have an income to replace, the death benefit can be used to pay for unpaid medical bills, memorial services and other final expenses.
Life insurance premiums are typically less expensive for children than comparable insurance for adults. The underwriting process for children’s life insurance is less strict, making obtaining life insurance much easier and faster than life insurance for adults. Usually all that is required is an application, with no medical tests, blood work or urine tests necessary.
There are many different types of life insurance products for children on the market. Some can have premiums paid in full over a certain period of time, as opposed to paid on for the life of the insured. Other products guarantee future insurability by allowing the insured to purchase additional insurance in the future without additional underwriting.
Permanent life insurance, such as whole life and universal life, is the most common type of life insurance for children. Permanent life insurance builds cash value on a tax-deferred basis. While the primary purpose of life insurance is a death benefit, that cash value can be used for emergency funds, education expenses, retirement savings, and much more. The cash value can also be borrowed from the policy through policy loans.
By looking past the mortality aspect, you can see the benefit of purchasing children’s life insurance to guarantee a child’s future insurability. With low-cost premiums and minimal underwriting, the application process is easy, quick and affordable. The decision to purchase life insurance on a child is a great investment for their future.