Buying life insurance for children is just one of the many ways you can give your child a financially sound future.
One of the biggest benefits is that there are an incredible variety of policies offered by many insurance companies. Most of these can fit any family's budget.
Buying a life insurance policy for your child when they are very young can help provide a financial nest egg for them as they grow. They will get a good financial head start when they reach young adulthood.
You can usually buy a policy starting within the first couple weeks from when your child is born and anytime thereafter up to either ages 14 or 17 years of age. Most policies will cover a child up to age 18 or 23.
We recommend that you buy life insurance for children sooner because premiums are low. Life insurance gets more expensive as you age.
If you want to wait until they're a little older, that's okay too. Either way, you are providing your child with life insurance protection while preparing them for their future.
Scroll down for an overview of the 2 best policies offering life insurance for children. These policies are through Gerber Life Insurance Company and Mutual of Omaha Life Insurance Company.
If you're still uncertain about whether it's right to buy life insurance for your children, we are going to take a look at some the most common reasons parents choose to do this.
5 Reasons Why Life Insurance for Children is a Good Idea
A life insurance policy for your children can offer many benefits and advantages as they grow up.
1. Provides Immediate Life Insurance Coverage
Your children will immediately receive life insurance coverage until at least 18 or 23 years old. (The age varies between insurance companies.) When the child policy is about to mature, most policies allow the child to continue coverage regardless of their health or occupation.
Most children are born healthy. Yet one never knows when a health issue such as diabetes or cancer can strike. Serious health issues can happen at any age. Having a policy in place when your child is young guarantees they can continue to have life insurance when they get older.
Your children will likely want to start a family of their own when they grow up. Should they develop a serious health issue when they are young, they may not be able to afford coverage later. Even worse, they could be declined altogether.
2. Life Insurance Policies for Children Cost Almost Nothing
Most life insurance companies provide face amount coverage ranging from $5,000 up to $50,000 for children's life insurance policies. The cost for these policies can be as low as $8 per month. The premiums will depend on the amount of coverage as well as the age of the child.
The premiums you pay are locked in for the duration. Which means you never have to worry about unexpected premium jumps.
3. Policies Offer a Cash Value Plus Living Benefits
You can provide a financial nest egg for your child when you choose a permanent life insurance policy for them. These are often called whole life or universal life policies.
As you pay the premiums, a certain amount is designated for the cash value accumulation portion which grows and accumulates interest over time.
Another benefit is that the owner of the policy (either you or your child) can borrow against the cash value portion of a permanent life insurance policy. You or your child can then use the borrowed funds in any manner you choose. Keep in mind borrowing against the policy will reduce the death benefits and is subject to interest.)
Many families use these funds to pay for:
- College tuition
- Down payment on a house
- Wedding expenses
- Collateral loans
- Buying their first car
If you are 100% sure your child will go to college, a 529 plan is a smart option to save for tuition. If you aren't sure, then the cash value accumulation gives your child more options for what to do with their future.
4. Double the Coverage Amounts
When the policy matures then your child has the option of assuming ownership. Most policies allow your children to automatically double the amount of coverage. This means if you bought a $20,000 or $50,000 dollar policy, your child can automatically increase their coverage to $40,000 or $100,000.
The additional coverage amounts will allow your children to build the cash value into a larger amount. At the same time, they can increase their life insurance coverage for their own families.
5. Provides for Funeral Expenses and Grieving Time
Although nobody wants to contemplate the death of any child for any reason, tragedies happen. Having a life insurance policy on your children allows you to cover the funeral expenses.
A policy will help to provide additional financial resources to cover other outstanding bills such as medical bills not covered by your health insurance.
A policy also provides a financial buffer to allow you to focus on grieving.
How to Buy Life Insurance for Children
Life insurance policies for children are now available through many companies. Whether you are a new parent or grandparent, you can give your child a great head start to help them build their future right now.
However, there are strategies to make sure it's the right plan for your family.
Life insurance policies for children all vary somewhat in term of coverage restrictions, underwriting, and particularly the cost - all of which can very significantly from company to company.
Wither so many different policies available, we always advise talking to an independent life insurance agent. Like the ones you can find here at Abrams Insurance Solutions.
Independent life insurance agents work for you and not the life insurance companies. We know which companies are more flexible for your child's particular needs.
Independent life insurance agents have access to dozens of life insurance companies. This allows us to perform the comparison shopping for you which will save you time and money.
Our agents will help you find the most suitable policy. We also promise to make sure it's the most affordable life insurance policy for your family.
If you have any questions on life insurance for children, then call Abrams Insurance Solutions today at (888) 905-0333. We are happy to answer any questions you have.
Overview of the 2 Best Companies Offering Life Insurance for Children
We are proud to offer access to the 2 best life insurance companies offering life insurance for children. These are:
- Gerber Life Insurance - The Grow-Up Plan
- United of Omaha Life Insurance - Children's Whole Life Insurance
Out of our analysis of the dozens of options for children's life insurance, these two stick out in their quality of plan as well as their pricing.
Gerber Life Insurance - The Grow-Up Plan
Gerber is a well known company that has been providing quality baby food for American children for generations.
It stands to reason that they would also be one of the top companies to offer premium quality life insurance for children. You may have even seen their commercials for it on TV.
The Grow-Up Plan is whole life insurance. This is a type of permanent life insurance which not only provides life insurance protections but additionally provides a cash value accumulation feature. The cash value grows based on your premium payments as well as interest growth.
The adult who buys the coverage will remain the policy owner until the child reaches age 21. At that point the child will then become the policy owner. Your child will then have the choice of keeping the policy, taking a loan against the cash value if needed, or requesting a payout.
If a financial need occurs while the adult owner still holds the policy, they also have the same options.
Gerber Grow-Up Plan Highlights
- Gerber Gorw-Up Plan life insurance offers face value coverage for your child or grandchild (it can also be purchased by legal guardians) ranging from $5,000 - $50,000
- Policy coverage is up to age 21
- Offers affordable premiums which never increase
- Coverage can be purchased for a child starting at 14 days old to 14 years old
- Coverage automatically doubles at age 18 without any increase in premium
Sample Monthly Premium Rates for Gerber Grow-Up Plan
Guaranteed Future Insurability for Your Child
When your child becomes the adult owner of the policy, they will have up to 4 opportunities to buy additional insurance. This availability occurs at age 21, 25, 35, and 40 years of age.
Each new policy can be as high as the face value of the policy when they turned 18. For example, let's say your child has a policy worth $50,000 when they turned 18 years old. If they take advantage of the first opportunity, their policy will automatically double to $100,000. The 4 opportunities to buy additional coverage means they could eventually have a $400,000 policy.
Payment Protection Option (PPO) Rider
The Gerber Grow-Up Plan also offers a payment protection rider for an additional minor cost. This rider will provide coverage for all premium payments should the owner of the policy become disabled or die before the child's 21st birthday. The PPO Rider is available for those owners who are between 18 and 50 years old.The child must be no older than age 18 as of their last birthday.
Mutual of Omaha Children's Whole Life Insurance
Mutual of Omaha is our 2nd featured company which offers another smart choice in life insurance for children. The children's policy they offer is also a whole life policy.
Children's Whole Life Policy Benefit Highlights
The main benefits of the Mutual of Omaha plan include the following:
- Face amounts from $5,000 - $30,000
- Available for children between 14 days old and 17 years old
- Whole life policy maturing at age 100
- Rates are guaranteed to never increase with age
- No medical exam required
- No decrease in benefits
- Provides a cash value accumulation which grows over time
- Allows for additional coverage to be purchased without having to provide any evidence of insurability
- Provides a variety of easy to manage payment options
Guaranteed Insurability Provision
Your child will also have the options to buy an additional whole life policy on several separate occasions. These include the policy anniversary dates following your child's 30th, 33rd, and 39th birthdays. The additional benefit amounts may not exceed the original face value of the of the original policy.
The catch is if you do not buy additional coverage on the first option date, then you will not be eligible for future purchase options.
Other Life Insurance Options for Children
There are other approaches in how you can buy life insurance for children. Many companies offer a Children's Term Rider which you attach to your own policy. A term rider provides death benefits only. It will not include a cash value accumulation feature.
Other companies also offer a children's rider which consists of a permanent life insurance policy. You can buy this as either a whole life policy rider or a guaranteed universal life rider.
How Abrams Insurance Solutions Can Help You Find Affordable Life Insurance for Children
Our independent life insurance agents have access to over 70 of the most progressive insurance companies in the industry. Every family that has children wants to protect them. Life insurance for children is a great way to give your child a good start to their adult lives.
Yet we also know how difficult it can be to find the right coverage at a great price. We can help you find the perfect coverage for your children. Our experience has given us insight into all the different underwriting requirements and coverage options available. Our agents will spend their time performing the comparison shopping for you, saving you time as well as money.
We won't stop shopping the market until we find you the best policy at the lowest rates.
Do you have questions about life insurance for children that we didn't answer? Give us a call at (888) 905-0333 and we will get you the information right away.