A child life insurance plan serves as both insurance and as an investment vehicle. Typically purchased by a parent or guardian, it covers the life of a minor and lasts for the child’s entire life (making it a type of permanent life insurance).
Coverage amounts of child life insurance are generally low, usually under $50,000, while premiums are locked in. For example, for a $25,000 policy on a newborn child, the average annual premium is just $150.
If you are considering child life insurance for your child, this blog post is for you. Here, the experts at USA Life Insurance Services will highlight the pros and cons of life insurance for children. Let’s get started.
What Are the Pros of Child Life Insurance?
There are a number of benefits of buying a child life insurance plan. The first is that it means that your child will be covered, even if they develop a health problem later in their life. What’s more, insurance companies often provide riders that allow your child to obtain additional coverage in the future without the need to undergo a medical examination.
As we have noted above, the premium for child life insurance is locked in. Therefore, this type of insurance offers excellent value for money over the course of your child’s lifetime.
In the event that the policyholder/parent dies, the money promised is paid to the child and the insurance company pays the future premiums. When purchasing a plan, you will be able to select between a maturity benefit and a death benefit.
Another benefit is that, in the event that your child needs to be hospitalized due to illness, serious injuries, or any other medical condition, it may be possible to withdraw funds (if this occurs within the policy’s term).
What Are the Cons of Child Life Insurance?
There are a number of potential drawbacks that you should be aware of when purchasing child life insurance. As with most types of insurance coverage, it is better to start early. It is best to purchase coverage as early as possible; waiting for several years may increase the premiums and limit the earnings.
If setting up an investment for your child is your primary goal, there are perhaps more suitable options available, given that life insurance cash value can take time to grow.
It’s also important to assess your budget and consider your own life insurance needs before you buy a child life insurance policy. Your own life insurance is generally more important than your child’s, as it can help to cover living costs and other expenses in the event of your death.
What You Need to Know About Child Life Insurance
The bottom line is that a child life insurance plan can help to make a child’s future brighter and more secure. If you are interested in learning more. whether about child life insurance, burial insurance, or other options, speak to the team at USA Life Insurance Services today. We look forward to speaking with you.