I recently read a blog from a financial planner that was about the top 10 insurance's that are a waste of money. Ironically several of the products were life insurance products, most notably that life insurance on children was a waste of money. The author who I will allow to remain anonymous argued that money should stop being wasted on insurance and should be invested instead. Unfortunately, he did not address the true reasons for purchasing this product, instead indicating that it was morbid to by life insurance on children. So today, we are going to take a look at why people buy life insurance on children.
First of all, people don’t buy life insurance on children to just pay for funeral expenses. If that were the case, people would just add a rider (an amendment that adds or removes coverage to a policy) to their own policy to cover that. Instead people buy life insurance on their children to give them the gift of insurance. This can be seen as cash value accrued on a whole life policy that they may have access to later, or most importantly the guaranteed insurability rider. There are several illnesses that cause people to be either ineligible or limited for life insurance as an adult (Cystic Fibrosis for instance). In order to give the gift of insurance parents (or family members) will purchase a policy with the Guaranteed Insurability rider, which allows the owner to purchase more insurance at pre-determined amounts and times. There are now some options for this product, traditionally this is done as a whole life product, however, there are now also term products that convert to whole life at a pre-set date. The term products can run as low as $35.00 a year for $15,000.00 dollars in coverage. Meanwhile, the whole life products can range in the 100-300 range based on the selected features selected and the company. There are many products which can give great inexpensive options to people, better enabling them to give the gift of insurability.
To learn more about Child based life insurance products in Minnesota, Wisconsin, Illinois, Michigan, Iowa, or Texas call the Garsys Agency today at 866-432-4753.