Life Insurance for Children

Over our years of helping people with their finances, we have witnessed times when the death of a child caused emotional and financial distress. While no one wants to “make money” on the death of a child, the simple truth is that funerals are expensive and the expenses of a lingering illness can be financially devastating. When the two happen simultaneously, the strain is more than most marriages can endure.

Aside from protecting your family from unexpected medical and final expenses, as a parent, there are reasons why buying life insurance for your children or grandchildren can enhance their financial futures, even if they life to a “ripe old age.”

Remember; it’s life insurance, not “death insurance.”

Situations And Causes	How The “Right” Life Insurance Helps
Life insurance premiums are based on age.	Starting life insurance early guarantees the lowest cost for life and allows the power of compound interest to work for them.
Accidents or childhood diseases can affect future insurability	Protects future insurability – the best time to buy life insurance is when you are young and healthy.
Dangerous occupations, hazardous activities and foreign travel can affect cost of premiums and insurability	Pilots, race car drivers, hazardous waste haulers, scuba diving, hang gliding, riding a motorcycle, sky diving, make the cost of insurance higher and may disqualify you form obtaining coverage.
Money For College or Trade School	Cash Value Life and dividends accumulate tax free, can be borrowed and used for tuition, housing,  or any other purpose.
Attractive Alternative to 529 plans	529 Plan money is exposed to stock market volatility. The market may crash at the start of schooling. The growth of life insurance cash values can be linked to the growth of the market with no downside risk.
Limited Premium Payments. Premiums are lower when you are younger. Why Pay Higher or Pay For The Rest Of Your Live?	Premiums can be completely paid up in as little as 10, 15 or 20 years. Dividends can be used to enhance the death benefit yearly.
Cheap Term Life Insurance gets expensive after the first 10, 15, 20 or 30 years.	Insurance companies love term insurance; it often gets too expensive to keep about the time the company may have to pay a death claim.
Term insurance “runs out” or gets too expensive.	Term insurance is cheap when you are young and healthy. As you age and your health deteriorates, premiums may get too expensive or coverage may be unobtainable.
Buy a $400,000 home; pay $1,2 million (the rest is interest) over the term of your mortgage. Pay Double Digit Interest to Borrow On Your Credit Card.	Alternative; Use a specially designed policy that enables you to “Be Your Own Banker;” build a tax free “stash of cash,” then borrow from yourself to fund auto, boat, home or other purchases; paying interest to yourself.
What If I Am Disabled, Can’t Work?	Premiums Waived During times of disability
Long Term Care	New Hybrid Policies pay long-term care chronic and critical illness costs.
Reasons For Life Insurance When You Are Young	Protect your spouse and children from financial loss should you die prematurely.
Reasons For Life Insurance When You Are Old	Replace lost Social Security or Pension Benefits, Pay For Long Term Care or Catastrophic Illness expenses.
Long-Term Care; Home Care; Frailty Care, Critical Illnesses, Chronic Illness, Terminal Illness	Modern-Day Life Insurance Policies permit you to access the death benefit to pay for expenses related to these conditions plus dementia, cognitive disease and Alzheimer’s Disease
Reasons For Life Insurance At the End of Life	Many of the world’s wealthiest families use life insurance to build tax free wealth for future generations knowing that wealth creates influence.

We never outgrow our need for life insurance; the reasons for having it do change,

However, We see people purchase life insurance in their 60’s, 70’s and beyond to replace pensions or social security at the death of the first spouse or to pay for long-term care, home care or frailty care. Our oldest purchaser was age 90; lived to 103.

We have also seen policies purchased by parents or grandparents whose dividends now pay the premiums and are sufficient to buy additional insurance each year. We have seen people borrow from their policies to pay off mortgages, buy vehicles, help their children or grandchildren get an education and start businesses.

Cash value life insurance is like a “Goose That Lays Golden Eggs.” Policies purchased for your children can enhance and protect their families and futures, give them access to money to buy their first house, keep them from having to beg their bank or credit union for loans, keep them out of debt, and pay themselves hundreds of thousands of dollars of interest they might otherwise pay to lenders. Those policies help your child or children i) avoid debt, ii) protect their families, iii) build a stronger financial future, iv) meet the costs of long-term care, v) pay for catastrophic illnesses and vi) build a financial dynasty and legacy for future generations.

Parents who help their children in this way are not detracting from their kids’ futures, they are assuring and enhancing them. The wise man leaves a legacy to his children and his children’s children. Step out in confidence.