Life insurance for children

By Steven Kobrin

Steven H. Kobrin, LUTCF


Would you like to give your children or grandchildren gifts that could last a lifetime? Would you like to give your children or grandchildren a gift that could provide a financial benefit many times greater than the original cost, and one that could in turn benefit their own children -- and all on a guaranteed basis? If so, then consider life insurance.

A cash value policy taken out on a minor could reap these benefits for your family. The cost is typically extremely low compared to the face amount, and yet both the premium and benefit could be guaranteed for life. When adulthood is reached, the policy can be gifted to them.

Here is a summary of the advantages of this truly unique gift:

1. Lowest possible pricing

The children can lock into the very low pricing available at young ages, and yet the price can never increase.

2. Insurability secured

If the children develop medical conditions later in life or take on another higher-risk activity such as scuba diving or mountain climbing, they won't have to worry about going to market and paying a higher rate -- or possibly getting declined altogether.

3. Significant cash values

Large amounts of cash can accumulate over time for use as a mortgage down payment, business capital, or retirement supplement.

4. Limited payments

The product could be designed to receive just one single payment or payments for a set number of years.

5. Increasing coverage

With the right product, the survivor benefit can increase over time.

Guidelines

Here are some guidelines to follow when you consider purchasing this product for your family:

1. A wide variety of permanent life insurance products, including whole life and universal life, can be available from financially strong carriers. Be sure to get prequalified so you will apply with the company that's right for you.

2. This gift works very well for boys and girls aged newborn to 20. Attractive pricing can be available, even for children who have medical conditions.

3. Be sure to discuss any gift tax questions you have with your tax advisor.

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