As a child, my parents never knew half the ways my friends and I unwittingly put our lives in danger. Looking back, it’s a wonder any of us survived. From BB gun wars to racing around farms on ATVs to (my personal favorite) creating rocket engines out of spent CO2 cartridges and a mixture of gunpowder and glue.* Somehow, I survived childhood with all my limbs intact.
Child life insurance is more about securing your child’s financial future than protecting against the loss of life.”
However, had the unthinkable happened and I perished due to an all-too-frequent lapse of judgement, it would not have been a financial burden on the family. In fact, based upon the amount of food I consumed during growth spurts, my demise would’ve proven a net profit. Why, then, did my father take out a child life insurance policy on me at the age of ten? Though I was tempted to think he was an astute observer and simply hedging his bets, I later learned he was looking to my future and trying to jump-start my own financial wellbeing. Child life insurance is more about securing your child’s financial future than protecting against the loss of life.
Cash for College or Other
Most child life insurance policies are permanent, meaning that, like an investment, they build cash value over the life of the policy. Think about it like buying a car verses renting one. With permanent life insurance, you get the benefit of building equity. Once the policy accumulates a certain level of cash value, loans can be taken from it for other purposes, such as paying college tuition, a home down payment, paying off debt, or supplementing retirement income later in life. Cash value loans feature lower interest rates, providing a better financial foundation as an adult.
Guaranteeing the Future
The older we are when purchasing life insurance, the higher our premiums will be. This is because the longer we live, the more likely we are to develop health issues. If a child develops certain medical conditions later in life, they will either pay more for coverage or possibly be denied altogether. In fact, many Americans have conditions that deny them coverage. However, by purchasing life insurance for your child when young and healthy, the benefits remain, and the rates are locked in. If a child later develops cancer, asthma, diabetes, or other health issues, their rates will not increase, providing an affordable financial safety net and peace of mind.
Change of Beneficiary
Once a child is grown, the beneficiary of the policy, the person receiving payment should a death occur, can be changed from the parent to another party, such as your child’s spouse. This can be a wonderful gift to a new family, especially when they begin having children of their own.
In full disclosure, life insurance for kids does cover the loss of life. My point is simply that child life insurance is much more than that. It focuses on today, providing a legacy for those you love, and allowing them to live more fully.
Please contact us with your child life insurance questions. Not a client of ours? Let us earn your business! Each client is assigned a personal agent in our office, given their email address, and provided a phone number that rings right on their desk.
David McCaleb LinkedIn
Bankers Insurance LLC
* The CO2 cartridge rocket engine was a bad idea of epic proportions, even considering my youth. Don’t try it. I stopped the practice after one blew up and, save for the fact I’d loaded it into a metal launcher which redirected the blast, I would’ve certainly been badly injured. My ears still ring to this day.