Buying life insurance for children or grandchildren is very simple!
In most cases, you will have to buy a whole life insurance policy for a child. Then, you can transfer the policy to the child when they become an adult.
You cannot buy a standalone term policy for a child. However, you can pay a little extra to get coverage for them on your own term policy.
Getting a whole life insurance policy for children
Purchasing a whole life insurance plan for children both protects in the case of their passing and protects against the costs (funeral, burial, and money to cover your bereavement time) in case of their passing.
Whole life policies build cash value over the years of holding the policy. The policy owner — you or the child once they reach adulthood — can borrow against the cash value or surrender the policy for the money. It may cost you a surrender fee, but that fee diminishes over time.
The cash value of the policy is tax-deferred. That means it is not taxed as income until you either withdraw the value or surrender the policy. However, a withdrawal is only taxed if it exceeds the amount you paid in premiums.
The amount of cash value you earn on a whole life policy is comparable to savings accounts and CDs. You can use the cash for anything.
Sometimes an overlooked bonus, purchasing a plan when they’re younger guarantees they have the ability to add coverage when they’re older regardless of health.
Adding a child to your term life insurance policy
Another avenue for buying life insurance for children is to pay a little extra to add coverage for a child to your own term life insurance policy. Sometimes, this will cover all the children in your household. However, be sure to ask you life insurance agent if this is the case for your policy.
This coverage for your child expires when the term ends or when the kid reaches adulthood.
We can get your kids covered and saving for their future!
If you have any questions about getting your child a life insurance policy, BTW Insurance has helped many families get their household covered. Feel free to message us or give us a call at 888.907.0174