The question of whether to buy life insurance for children sparks strong debate about the value of such policies. For these reasons, some life insurance agents say purchasing life insurance on a child can be a smart financial move, but many financial advisors caution against it. Most insurance agents and advisors can agree, though, on one point: Other, more critical financial matters should come first before you even think about buying a life insurance policy on a child.
And maybe you thought, That sounds like a win-win. Hang on a second! You should have the facts before you start calling up insurance companies.
Life insurance offers peace of mind that your family will be cared for after you die. There are many reasons people buy life insurance. They purchase coverage to cover final expenses, such as funeral and burial.
Level-premium insurance is term life insurance for which the premiums are guaranteed to remain the same throughout the contract, while the amount of coverage provided increases. As a result, the coverage can be advantageous over time as a policyholder keeps paying the same amount but has access to increased benefit coverage as the policy matures. The most common terms are 10, 15, 20 and 30 years, based on the needs of the policyholder.
Price will no doubt factor into your decision and may even determine what type of policy you choose. To give you a snapshot of those prices, NerdWallet compared average life insurance rates for men and women at different ages and for different policy lengths. Life insurance rates are based primarily on life expectancy, so many factors help determine rates, including gender, age, health and whether you smoke.
If you have a car, you have car insurance. If you have a life. Its purpose is simple: to replace your income for your family if you die.
For most people that means buying life, disability, health, and car insurance. We also look at car insurance for teenagers, if you have kids at that stage. A new baby is a celebration of life, but also the beginning of a long-term financial commitment.
Depending on what you read, buying life insurance for children is a great act of love or a terrible idea. But many financial planners caution against spending money on child life policies, saying there are better ways to protect children financially. Most child life insurance policies are whole life, a type of permanent life insurance. Whole life policies include a savings account called cash value, which grows slowly over time.
Whole Life Insurance is a good choice for people who want their life insurance portfolio to incorporate some savings element, and who desire stability and ease of use. Determining the amount of coverage you need takes careful and advanced financial planning. You want to make sure you have enough coverage, but not so much as to become unaffordable.