It is very hard to say "how much" is life insurance on a child. There are certain factors that need to be known before an accurate answer can be given. Before any life insurance is taken out on a child the parents of the child should be covered first not just the child.
But, to address the question at hand as best as possible I will give a scenario: Male 1 year old, 100K Indexed Universal Life policy with American General is $426 a year with an estimated cash value of $675,000 at age 67. This is just an illustration and not to be taken as written in stone. There are numerous factors that are involved when designing a policy with different variables and companies.
The upper end of cost could be anything depending on amount and health. The lowest I have seen is zero. At least one company will give a small child rider at no cost on a parent or grandparent's policy.
Many child riders fall in the range of $20,000 for for about $8. per month. However that covers all minor children. So if you have 4 children your per child cost would be $2. Coverage usually stays in force as long as the base plan does up to the child's age 25. And is convertible to five time the original amount. with no evidence of good health. This can be a very important feature.
Individual plans run a very wide range based on the type and amount. Recently we wrote a child with a lung disease $25,000 of whole life at about $20 per month and a 17 year old $250,000 term for about $14 per month.
So the answer is, $0 to a lot. Best to talk to an independent agent.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
I am actually working on these policies right now for a few clients. They are choosing an amount they want to spend per year, and committing that to a policy for their children.
The basic objective is to accumulate an attractive amount of money that could then be distributed as supplemental retirement income later on in the kids’ lives. Since this money will grow over literally decades, enough can be grown so that the yearly income can be substantial.
We are kind of backing into the face amount once we decide on the yearly contribution and on how much money we would like to let the children take out of the policy when the time is right.
So, like anything else, you get what you pay for it. You can go high or low on the funding, and high or low on the face amount. It all depends on what role you want life insurance to play in wealth accumulation for your children. Why not go for it?!
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But, to address the question at hand as best as possible I will give a scenario: Male 1 year old, 100K Indexed Universal Life policy with American General is $426 a year with an estimated cash value of $675,000 at age 67. This is just an illustration and not to be taken as written in stone. There are numerous factors that are involved when designing a policy with different variables and companies.
Many child riders fall in the range of $20,000 for for about $8. per month. However that covers all minor children. So if you have 4 children your per child cost would be $2. Coverage usually stays in force as long as the base plan does up to the child's age 25. And is convertible to five time the original amount. with no evidence of good health. This can be a very important feature.
Individual plans run a very wide range based on the type and amount. Recently we wrote a child with a lung disease $25,000 of whole life at about $20 per month and a 17 year old $250,000 term for about $14 per month.
So the answer is, $0 to a lot. Best to talk to an independent agent.
The basic objective is to accumulate an attractive amount of money that could then be distributed as supplemental retirement income later on in the kids’ lives. Since this money will grow over literally decades, enough can be grown so that the yearly income can be substantial.
We are kind of backing into the face amount once we decide on the yearly contribution and on how much money we would like to let the children take out of the policy when the time is right.
So, like anything else, you get what you pay for it. You can go high or low on the funding, and high or low on the face amount. It all depends on what role you want life insurance to play in wealth accumulation for your children. Why not go for it?!