Grandchildren Life Insurance

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The death of a child isn’t something parents want to think about. But life insurance isn’t necessarily all about death. Child life insurance is about the future and preparation. Taking steps today can help create a better tomorrow. And as parents or grandparents, our chief concern is making the future better for our children.

How Does Child Life Insurance Help a Child?

Right now, when a child is young, strong, and healthy, life insurance is obtainable at a minimum cost. But if a child develops a problem like a chronic disease, life insurance can be almost impossible to obtain. So signing up for a low premium term life insurance policy now, with a guaranteed periodic purchase option, will make it possible for them to have life insurance as adults.

Another possibility for them is to purchase a whole life insurance policy, which will last for the rest of their lives. Their age and health status won’t make any difference, nor will it matter if they serve in the military or have dangerous occupation hazards.

Such child life insurance is perfect for planning for the future because of the cash value the plan would accumulate. As an adult, they could borrow against this value or stop the policy and withdraw the money (to pay for college or any number of things).

Who Can Purchase a Child Life Insurance Policy?

Parents, grandparents, and legal guardians can all purchase child life insurance policies. New parents often have heavy financial burdens during the first few years of a child’s life, and buying insurance is difficult. So grandparents (who might be more financially stable) purchase insurance for their grandchildren.

When Does Coverage Start for a Child Life Insurance Policy?

When you start a life insurance policy for a child, the coverage begins immediately. There are no necessary medical exams to go through,just a few health related questions on the application is generally enough to get a child qualified.

The rates for child life insurance vary. Whole life rates stay the same. Term life rates depend on the policy, how old the child is, and several other factors. Policy renewal agreements can vary also, so make sure it’s spelled out before signing up for term policies. Some times you can purchase a term policy and then switch it to whole life at the end of the policy’s period.

Child life insurance policies can last as long as you wish to sign for. Again, whole life policies for children don’t ever end, while term policies are defined before you purchase it.

Who Receives the Benefits?

In child life insurance policies, the parents or legal guardians are the beneficiaries. But the one who benefits the most is the child. He or she benefits from the security of a life insurance policy that will continue even if he or she is diagnosed with a life threatening disease. Secure your children’s future now with child life insurance. It’s good for them, it’s good for you

Talk to your Insurance Agent to ensure Child Life Insurance is right for you!

14 thoughts on “Grandchildren Life Insurance”

  1. This is very interesting, You’re a very skilled blogger. I’ve joined your feed and look forward to seeking more of your excellent post. Also, I’ve shared your web site in my social networks!

  2. One of the biggest reasons to purchase life insurance for grandchildren or children is because premiums tend to increase as we age. If you purchase permanent insurance, with a fixed premium, you can take advantage of an opportunity to lock in very low rates. The child will enjoy a lifetime of protection at very low rates.

  3. Can my father take out life insurance policies on my children, his grandchildren, without me knowing? If so, is there anything I can do or any way to find out?

  4. Cash value policies also can increase in value. Some people use these types of policies as coverage, but also as a form of savings or investment. If you know the child or grandchild will need money in the future, for education or other needs, a cash value policy may be one way to make sure that the family has access to money.

    This is not a short term solution, and there may be better ways to invest your money, but if you like the idea of combining life insurance and an asset account, you may want to consider buying a permanent, cash value life policy.

  5. Do you need the perfect present for a new grand child? How about getting a life insurance policy. This may seem quite unusual, but a policy can give that child benefits he or she will thank you for many years in the future.Why do people purchase life insurance for grandchildren and children? Let us consider a few good reasons. You may be able to buy your loved ones a lifetime of benefits for a very small amount of money.For one thing, premiums are usually pretty low for younger people. You probably already know that premiums increase as we age. You can purchase a policy with a guaranteed rate today. Then the child will still get the same low rates in the future. You can also find policies that can be paid off over the course of several years. You may purchase a policy like this, pay it off, and then hand your grandchild a lifetime of coverage when he or she is an adult.Some children’s life insurance policies have a handy rider that allows the insured person to add to his or her coverage when she becomes an adult. This provision allows the insured person to add more coverage without having to go through health underwriting.You could buy a small policy now, and your grand child has the option of adding more face value later when he or she has started working. You should check to see if the child will be able to add to the face value no matter how healthy he or she is at the time. If your grandchild did develop an illness, he or she would not have to submit to any health underwriting later.If you buy a cash value policy, you may enjoy other benefits too. They may actually grow in value. In fact, many people use cash value policies, like whole or universal life, in order to save for the future. You may have heard that life insurance policies are not great investments. This may be sure, but they also provide coverage. This way you get one policy that does double duty.You can find an affordable policy that you can pay for today. This policy can provide a cash account to use in a few years. The child may need the money to pay for an education, start a business, or purchase a first home. This allows you to help out without needing to have a lot of money! When you have a cash account, you can cash it in or borrow money from it.If funds are tight, and you just want to buy life insurance, you may also be able to add a child or grandchild rider (option) onto an adult policy. Doing this may still allow the child to enjoy some benefits of being covered.Life insurance is a thoughtful gift for a grandchild. Instead of buying the latest video game or electronic gadget, you could be giving somebody you love a lifetime of coverage and more financial security.

  6. Deciding whether to buy a life insurance policy for a child can be difficult, and there is strong disagreement over the benefits of such policies.

    Advocates assure you that life insurance policies for children are great financial tools as part of larger portfolios of savings and investments.

    In contrast, critics assert that insurance for kids is a waste of money for most families, since it rarely replaces lost income. Their message? Just say “no.”

    Typically it is not a good buy, says James Miles, a consulting fellow for the Society of Actuaries.

    Tony Steuer, author of the book “Questions and Answers on Life Insurance,” agrees.

    “You get back to the real reason for life insurance,” Steuer says. “You are replacing somebody’s income.”

    Unlike typical term life insurance policies, which are less expensive, permanent life builds up cash value that you can tap into. One reason frequently given for buying permanent life policies for children is to protect their future insurability. Permanent life can be maintained after the child becomes an adult.

    Saving for college

    Matt Rowles, a director in advanced marketing for individual life insurance at Prudential Financial, doesn’t encourage parents to use child life insurance as a method of saving money.

    “There are a lot of better ways to save money, particularly if there is a college funding need in mind,” he says.

    Certified Financial Planner Larry Ginsburg, a board member of the United Policyholders consumer advocacy group, says 529 education plans are far better college savings tools. These qualified tuition plans are sponsored by states, state agencies or educational institutions and are authorized by Section 529 of the Internal Revenue Code. There are two types of 529 plans: pre-paid tuition plans and college savings plans.

    In their early years, permanent life policies grow slowly. The trade-off is that they have predictable returns, while 529 plans rely on the performance of the investments in their funds.

    Permanent life monies are guaranteed and the annual growth is predictable, says Miles. Although you may be able to earn more with a 529 plan, there is no guarantee you will.

    While saving for college may not be the best use for life insurance, permanent policies — as part of a larger financial portfolio for children — can be beneficial in certain cases because you can borrow from the cash value of the policy.

    First things first: Insure the parents

    Jack Hungelmann, the author of the book “Insurance for Dummies,” says parents and grandparents sometimes make the mistake of insuring children’s lives “when the worst economic loss would be the loss of a parent’s income.”

    “The first and foremost thing to do is make sure that Mom and Dad have enough life insurance,” he adds. “The only thing worse than losing a parent is losing a parent without adequate life insurance. That is where the focus should be.”

    Children typically don’t need life insurance, says James H. Hunt, a life insurance actuary at the Consumer Federation of America’s EvaluateLifeInsurance.org. “Frequently, the policies are bought in small amounts that 20 years later don’t amount to much. My feeling is parents should buy insurance on themselves.”

    If you feel you must buy life insurance for your children, Hunt favors the cheaper term life policies. In the past, some insurance companies pushed their agents to sell permanent life insurance policies for kids simply because they generate more profits for insurers, he adds.

    “When I was first in the life insurance business in 1955, the agents had a saying,” Hunt recalls. “If you can’t sell the old man, sell the kid.”

    Advocating cash value life insurance

    There are times when it makes sense to buy life insurance for children as a part of a long-term financial strategy, says Marvin H. Feldman, president and CEO of the Life and Health Insurance Foundation for Education (LIFE), a nonprofit organization that helps consumers make insurance decisions. He considers permanent life insurance to be a special asset class, like bonds or cash.

    Traditionally, there have been easier ways to build wealth for children, he says, but in today’s low-interest-rate investment climate, permanent life insurance is looking more attractive. The rate of return can be a combination of the guaranteed cash value and dividends that may be paid in the future, Feldman explains.

    “People would say, ‘You only have a 3% to 5% rate of return over 20 years,’ but that is better than just about anything you can do today with safe, secure monies, and insurance has low risk,” he says.

    Permanent life insurance isn’t appealing to parents who are prepared to roll the dice in the stock market to build an investment portfolio for their child, he adds. It’s a slow-but-steady approach.

    “Investment advisers are looking at permanent whole life insurance and saying, ‘This is a tool for safe, secure rates of return,” he says. “When that child is ready to get married, start a business, those values will be there for them. There will never be an 8% or 10% or 12% return, but the trade-off is that there’s little or no risk. The vast majority of investments insurance companies make are in government bonds.”

    Creating a legacy

    Some people buy permanent life insurance policies for their kids or grandchildren as a way of ensuring that the children will remember them fondly.

    “When each of my grandchildren were born I purchased whole life policies guaranteed to be fully paid up at age 18,” says Feldman. “At that time there are no further premiums to pay. They can surrender the policy for the cash value or they can keep [the] death benefit and borrow the cash value. The net death benefit will be reduced by what they borrow. If they choose to repay the loan at some point, they can do so,” restoring the cash value.

    Feldman acknowledges that permanent life insurance is a financial tool that doesn’t work for every family.

    “You have tremendous flexibility [but] it’s important to work with an insurance professional or a financial adviser, because you do have to design the products carefully,” he says.

    There are so many varieties of permanent life insurance that buying it can be an overwhelming experience. “It is not for everyone,” says Jeff Lipscomb, a Certified Financial Consultant based in San Diego. “This is for people with disposable income.”

    Larry Dahl, vice president of Allstate Financial, cautions that you should be very careful when choosing a permanent life policy for a child or an adult.

    “Unless someone really takes the time to understand what is available and has a good financial background, the role of a life insurance professional is very important to make sure the right product is selected to fulfill an individual and a family’s needs,” he says. “There are just so many different types out there.”

  7. The best time to start life insurance for your children or grandchildren is when they are young and in good health. A serious illness or injury could make insurance very expensive or even unavailable in the future. The Globe Young American Plan® is the beginning of a lifetime estate and it is the smartest way to protect your young loved ones’ ability to get life insurance in the future. Join over 3.8 million policyholders that own a Globe Life and Accident Insurance Plan — get a free child whole life insurance quote today.

  8. Certainly with your thoughts here and that i love your blog! I’ve bookmarked it making sure that I can come back & read more in the foreseeable future.

  9. Can my father take out life insurance policies on my children, his grandchildren, without me knowing? If so, is there anything I can do or any way to find out?

    He could file paperwork and could easily slip it through the cracks to get it placed, but you could have it cancelled, assuming you are the legal guardian. Finding the company could be difficult though. Contacting the state insurance commissioner might be necessary to allow them to contact all 2000+ insurance companies at once looking for the policy.

  10. Have you ever considered buying life insurance for your grand kids? If not, maybe you should consider it. It will be one gift that can produce benefits for many years in the future. It may seem odd to think about buying life coverage for children. But those children will grow up faster than you think!

    Why do people purchase life insurance for grandchildren and children? Let us consider a few good reasons. You may be able to buy your loved ones a lifetime of benefits for a very small amount of money.

    For one thing, premiums are usually pretty low for younger people. Life insurance rates go up as we get older. If you purchase a fixed rate policy now, when your grandchildren are still very young, they can enjoy low rates forever. You can also find policies that can be paid off over the course of several years. You may purchase a policy like this, pay it off, and then hand your grandchild a lifetime of coverage when he or she is an adult.

    Some children’s life insurance policies have a handy rider that allows the insured person to add to his or her coverage when she becomes an adult. This provision allows the insured person to add more coverage without having to go through health underwriting.

    You could buy a small policy now, and your grand child has the option of adding more face value later when he or she has started working. This provision usually allows the insured person to add coverage, regardless of health too. If your grandchild did develop an illness, he or she would not have to submit to any health underwriting later.

    Cash value policies can also perform another function. They may actually grow in value. In fact, many people use cash value policies, like whole or universal life, in order to save for the future. Life insurance is not always the very best way to invest money, but it is handy to have a policy that does double duty as a type of an investment or savings vehicle.

    You could offer to pay premiums now, and in return, use the cash value of the policy later. The child may need the money to pay for an education, start a business, or purchase a first home. You would be providing this valuable resource without having to come up with a big lump sum of cash! If the policy has grown a cash value, it can be cashed in or borrowed against.

    If funds are tight, and you just want to buy life insurance, you may also be able to add a child or grandchild rider (option) onto an adult policy. This may give the child some of the benefits of having his or her own policy.

    Life insurance is a thoughtful gift for a grandchild. Instead of buying the latest video game or electronic gadget, you could be giving somebody you love a lifetime of coverage and more financial security.

  11. I have 9 grandchildren from age 4 months to 8 years old 2 boys 7 girls verry healty how much with insurance cost me for all 9

    There are a lot of variables here, you have covered the ages. If they are all healthy then the other variables are what kind of insurance and how much insurance do you want? When it comes to insuring children, Whole Life is the best way to go. If you can find and afford a short term premium like a 20-Pay Life that would be best. In other words it is all paid up in 20 years. Today Final Expenses cost (depending on where you live) around $10-$15,000. When your grandchildren are elderly it may be closer to $25-$35K or more. So you may wish to buy them a higher amount now, if you can afford it.

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