The debate over whether it’s a good idea to purchase life insurance for your children rages on. You can purchase insurance for them, but you’ll need to know the difference between the two primary types that are available for them. Also, know about a few benefits that your children will get when life insurance is bought for them at young age.
In life insurance there are two types of insurance, permanent and term. Some insurance agents and even parents don’t feel that buying a policy for a child is a very necessary thing to do. After all, insurance is meant to provide for dependents, and a child doesn’t have any dependents to take care of. Rather the focus is on the parents buying a policy to provide for their children. The decision of course is up to you, but you must know that it is rare to find insurance that is a term policy for children. Most insurance is written as permanent life insurance.
Life insurance that’s term pays cash benefits only if your child dies within the term of the policy. The positive side is that this type of coverage is cheap to start out, and then goes up the closer it gets to the end of it. If illness or accident does happen to your children during this time frame you will get cash benefit, but it’s off set by rising premiums. The positive side is that you can afford it, and you can get this coverage that will later convert to a permanent policy that has several benefits to it. Check out your policy on how soon you must covert your life insurance.
Life insurance in a permanent policy is very different. If you buy the insurance you’ll pay much higher premiums as long as you have it. You’ll have to plan very carefully a budget to keep the insurance in force for a long time. However, you children will be able to use the benefits of having it because it stands as collateral for loans. This can provide for their education, or for other expenses in life. Buying either type of coverage is a serious decision, so make sure you know what the life insurance consists of.
Over all it’s a good idea to have life insurance for your children. By buying it now they can keep it as long as they want, even if later on in life they become ill with any serious disease, and the rates won’t go up either. It’s good to know that you can get some policies that give you the guarantee to be able to purchase more insurance at a later time, and your children won’t have to be approved again for life insurance.
In today’s world it’s a good idea to have life insurance. What type of insurance is up to you, but remember life insurance for your children just might be a good idea because you never know the future.