Children’s Insurance: Do You Really Need It?

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A parent or guardian may purchase children’s insurance as a safety net in case a child unexpectedly passes away. Most of these policies are term-based, meaning they last until the child becomes an adult. However, it is possible to buy a permanent policy, which protects the child for their entire life at a locked-in, lower rate.

Children’s Insurance: Do You Really Need It?

With children’s insurance, you receive a death benefit as the beneficiary if the child passes away. Although not for everyone, you may want to consider purchasing children’s insurance if the following apply to you:

  • The future insurability of your child is important—If you purchase a whole children’s life insurance policy, you may be able to secure coverage for a lifetime, as long as premiums are paid regularly. After a certain age, your child may then be able to purchase additional coverage, regardless of their age, health conditions, or occupation.
  • You want to lock in lower premiums—The younger the person is being insured, the cheaper the premiums will be. If you buy children’s insurance now, you may be able to lock in a lower rate that will not increase over time.
  • You want to save for the future—Many whole life insurance policies include a savings component, known as the cash value. This cash value will increase at a fixed rate over time, and you can borrow against or pay out if the policy is ever surrendered. Some parents use these policies as a way to save for their children’s college education.

Although beneficial in many cases, there are other ways to save for your child’s future than a children’s life insurance policy. Please reach out to Planning Bucket to complete their questionnaire, so they can provide you with more information.