What is life insurance for Children?
If you are a parent, you can realize it is a 24/7 job; you always want the best for your children. You work to provide them with food, education, good health, and shelter but most importantly, you aim to secure their future. One important task in your to-do-for-them is to make them financially secured.
Life Insurance For Children
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Should you buy life insurance for children?
Generally, it is known that buying life insurance for Children is a waste of money given that there are other saving alternatives available for them. Life insurances are usually purchased for those individuals who are the breadwinners of the family or whose death can bring a huge financial blow to the family. Being financially dependent on parents for financial security, Children do not require financial security as such. However, you should buy life insurance for children in two cases:
- If your child is born with an acute disease, his hospital bills could be a strain for your pocket. Insurance for children can help you secure the hospital bills. In case of uncertain death, the death benefit provides coverage for the funeral expenses as well. It is tough to imagine your child’s death, but it is even harder to manage any unexpected expenses. Therefore, you should buy a children’s life insurance policy.
- Life insurance for children provides a saving component to the child. It helps them to gain financial security in the future. The coverage can be used to pay the college funds or invest elsewhere.
Who can buy a child's life insurance?
Children are not financially empowered, making it very obvious why they cannot buy insurance for themselves. Life insurance for children can be purchased by either parents or grandparents. Thus, they are the policyholders while the insurer is the child. If a grandparent wishes to buy insurance for grandchildren, he can do so without getting the parents’ consent.
How does children life insurance work?
The process to acquire life insurance for children is very simple and straightforward. The application can be filled either through an agent or online. The process may or may not require any medical examination depending on the company from which the insurance is being purchased.
Life insurance available for Children is usually whole life insurance, which means that it provides life-long coverage. Like every whole life insurance, the premiums are to be paid for a lifetime. For a child, his parents are the policyholders for the insurance as they are paying the premiums. However, upon turning 18, the child becomes the owner of his policy. He can withdraw the insurance if he wishes to do so.
How much does life insurance for children cost?
The cost of the life insurance for children cost as per the preferences and requirements. Mostly, the coverage range of $25,000 to $50,000 is a sufficient amount to protect the financial grounds of the children. However, many companies offer coverage as low as $10,000 as well. The premium rates are dependent on the coverage amount. The more the coverage, the more the premium payment.
Pros of Buying Life Insurance for a Child
Despite the popular opinion that life insurance for children is an extra expenditure, buying insurance for children at an early age can be financially feasible. This is because insurance gets more and more expensive as the person gets old. Therefore, insurance bought at an early age is a wise way of locking in a cheap insurance policy.
Life insurance for children can work like a piggy bank that saves money for the future plan. In case of any uncertain times, the benefit of insurance works as a financial backup for the child. In case your child has a critical birth disease or he develops an illness later in his life, the insurance amount can be used to pay the hospital bills.
What is the minimum age for child life insurance?
There is no age limit to get life insurance for children. Where the upper age limit is mostly 17 years old, each company has its own lower age limit. For instance, Gerber life insurance has an insurance policy plan for children who are just 14 days old. The earlier the policy is purchased, the greater the possibility of locking in a cheap insurance policy.