When you have children, you may be wondering if you should buy whole or term life insurance for them. Here are some reasons why you may want to consider it and how to know if this step makes financial sense for your family.
Life insurance is often a consideration that comes up at important times in your life - when you get married when you purchase your first home, or when you have your first child. While purchasing insurance for you and your spouse is often a given, you may find yourself wondering if you should buy some life insurance for your child.
Some of the reasons why people buy whole or term life insurance for their children include:
- To ensure their insurability later on in life
- To save them costs on life insurance in the future
- To create a savings vessel that can be used in the future
- To provide funeral cost expense money and funds for other related expenses should your child die unexpectedly
Our Mortgage Life Insurance Products Help Protect Your Loved Ones
At AIME, we understand just how important family is. That’s why we offer affordable, customizable, and flexible mortgage life insurance products to help protect your home and your loved ones.
Whatever your needs, our licensed agents can help you find the right policy for your budget and situation. Want to know more?
Why Should I Buy Whole or Term Life Insurance For My Child?
One of the biggest benefits of buying life insurance for children is that rates are based on age and overall health. This means that a child who is young and healthy will have lower premiums. As they get older, their chances of developing illnesses increase, and life insurance policies may then require medical exams or result in higher costs.
Point to consider: Taking care of a whole life policy for your child while they’re still young can provide them with a safety net later, at a lower cost.
Buying Life Insurance For Your Child: What Are My Options?
You have a few options when it comes to buying life insurance for your child. Here are two ways you could go about it:
- Term Life Insurance Policy: If you and your spouse have a term life insurance policy, then you can buy some coverage on your child’s life. This is done by buying a ride (an extra policy feature at an added cost) that will extend a small amount to your children.
- Term life insurance provides coverage for a certain period (eg. 10,20,30 years)
- It pays a death benefit to the beneficiary if the insured person dies during the term.
- This is the only way to buy term life insurance for a child. There aren’t any standalone term life insurance policies for minors.
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Whole Life Insurance Policy: Another alternative is to buy a permanent life insurance policy. This will provide coverage for your child’s entire life and includes a savings account that gradually builds value over time. As a result, the premiums will be more expensive than for a term life insurance policy.
4 Things to Consider Before Buying Life Insurance For Your Child
Balancing budgets, building wealth, and finding ways to make ends meet, can be difficult, especially when you have a young family.
If you’re considering buying life insurance for your child, then here are 4 keys things you should think about first:
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Do you have an emergency fund? Instead of buying life insurance for your child, would it be easier to start up an emergency savings account that could pay for fees such as medical bills or funeral costs?
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Do you have a good health insurance plan? A good health insurance plan for your child is an excellent way to protect their health and prevent some illnesses. Consider this instead of a life insurance plan, as good health leads to longer lives and peace of mind.
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Have you started a college savings fund? If you’re finding it difficult to save up for your child’s education, then a whole life child insurance policy can help create a savings fund for them.
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What are your risks? Accidents can happen to anyone, but does your child have any specific health risks that you are concerned about? If so, then a life insurance policy may be the right way to go.
Call Today
To find out more about our mortgage life insurance policies and how AIME can help keep your family financially secure, contact our licensed agents today at 1-844-974-2020 or fill in our online contact form.
