It’s difficult to think about buying life insurance policies for your children. What if you knew that a life insurance policy can provide financial benefits for your children that can be enjoyed throughout their lives. Would that change your mind about buying this important policy?
Life insurance premiums are determined by the age, health, height and weight of the applicant for the policy. It will get increasingly expensive for your children to buy insurance as they age —even if they have perfect health for the majority of their life. If you decide to invest in a life insurance policy for your kids, you guarantee a low premium that they can enjoy for the rest of their lives, as long as the policy doesn’t lapse and the policy premiums are paid.
This premium advantage can be useful when your children grow into adults and parents themselves, and the presence of a policy means that your children’s children won’t need to worry about being left without any financial means after the unexpected death of their parent.
Buying a life insurance policy for your child can create a positive effect his or her future finances and even go on to help the lives of your future grandchildren.
Whole life policies accrue cash values that generate equity for the policyholder. The cash values can be loaned out to create tax-free loan incomes and can be received if the policy is surrendered (which may be a taxable event). Letting this cash accumulate in a life insurance policy creates a tax-deferred place for growth that does not include a restrictive environment for the spending of the loan proceeds, like a Coverdell or 529 plan can do.
The cash values in whole life policies have multiple ways of growing, which means they can balance many different risk tolerance levels. For conservative growth, choose a fixed rate policy. For more aggressive or risky growth, you can look at variable and indexed policies that have sub-accounts with underlying investments that go up or down according to market.
This collecting of cash and growth gives your child allowance to a fund that they can use to pay for college expenses, make a down payment on a home, buy a car, and so on. This will offer them a large financial advantage, saving them interest (the interest on cash value loans is paid back to the policyholder) and releasing them from the weight of loans that are placed on many young people trying to get started in life.
A life insurance policy has the weight of being the one type of policy that is ultimately useful when the loss of a loved one occurs. But that doesn’t mean its only use has to be one related with a time of loss and grieving. Instead, you can focus on helping to provide the happy and bright future for your child to be more financially stable and hold even more exciting options for growth.
If you have questions on how to provide life insurance for your family, please give Glory Insurance Group a call at 702-616-0889. At Glory Insurance Group, our primary focus is helping clients find the right solutions for all their Henderson life insurance questions.