I am not sure I would say that a child needs life insurance. There are two main reasons to insure a child, one is financial savings and the other is protecting insurability.
Writing a whole life or universal life policy, or cash value plan, on a child has advantages to be able to save extra money for college, a first home or even retirement. The premiums are very affordable and with the right plan can have a good guaranteed rate of return on investment.
The second reason is protect the child's insurability. If you purchase life insurance on a child most all companies have a conversion clause which means the child can convert to higher face amounts, five, ten or greater times the original death benefit without proof of insurability. If the child had a diagnosis in later life and became uninsurable then they would have this policy at a very reasonable rate for the rest of their life.
I agree with Tim that one cannot really say a child "needs" life insurance. But when they are adults, they may need life insurance to cover financial obligations, and be unable to get it because of a health condition. Getting life insurance while they are young and healthy ensures that they will have a policy when it is needed. Even just adding a small child rider to your policy will enable them to have 5 times that amount when they become an adult.
President, Lane Independent Agency, Southern California
Life insurance for children is a great plan. The younger the better. The younger they are, past about 2 weeks old, the rates are extremely low. Ridiculously low in fact. This will guarantee their insurability for the rest of their lives. Get a permanent policy and they can be covered until they die, at that same very low rate. And they even borrow against it for college or retirement, or other needs, and keep the money tax free. It is an incredible deal! Thank you. GARY LANE.
That is a great question! I can give you three reasons why it makes sense to have life insurance on your child. The first is that unfortunately, children die also. Unless you have the money to cover funeral costs, a very inexpensive policy can be a financial lifesaver. The second is that children can often develop health issues that would prevent , or make prohibitively expensive, getting a policy. Anything that leaves the child requiring home health care is enough to get them declined by many companies. The third is for financial security. Many companies will allow the increasing of the face value at points along the child's life, and there is a cash value that grows along with the child. The right policy can ensure a good chunk of change is available if needed one day. I have policies on my kids, if that helps. If you would like to discuss this more, please feel free to contact me, I'd be happy to help. Thanks for asking!
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Writing a whole life or universal life policy, or cash value plan, on a child has advantages to be able to save extra money for college, a first home or even retirement. The premiums are very affordable and with the right plan can have a good guaranteed rate of return on investment.
The second reason is protect the child's insurability. If you purchase life insurance on a child most all companies have a conversion clause which means the child can convert to higher face amounts, five, ten or greater times the original death benefit without proof of insurability. If the child had a diagnosis in later life and became uninsurable then they would have this policy at a very reasonable rate for the rest of their life.