Life insurance is not just for adults. When structured appropriately, the purchase of whole life insurance can be a great gift to a child or grandchild. Purchasing a whole life insurance policy, which has a cash value component to accumulate money over the life of the policy, might be a good way to contribute towards a savings plan for your child or grandchild. Although this benefit is certainly nice, it’s not the biggest reason that you should consider purchasing a whole life insurance policy through trial.
Whole life insurance is different from term life in that it lasts as long as the insured individual lives so long as the premiums are paid. When you purchase coverage at a young age, the premium payment is at its lowest. Since a child doesn’t necessarily fall into an insurance company’s typical classification of rates, you can lock in coverage at an affordable cost that will also generate savings as the child grows up.
Since children most often receive a preferred rate class, this locks in coverage at the cheapest possible rate. The biggest benefit to doing this is that it ensures against the future possibility of illnesses or other medical problems. There are a variety of illnesses or medical problems that can make insurance cost prohibitive or impossible to obtain for young adults or adults. Whole life insurance purchased for children, though, guarantees that coverage even if an illness or disease were to develop later on in the child’s life. Imagine that you have a grandchild who contracts a terminal illness in their adult life. If their whole life insurance policy is still in existence, they can name beneficiaries to receive a death benefit after they pass away. If the individual had tried to obtain life insurance on their own as an adult, she probably would have been denied. Getting life insurance early is a great way to obtain value and protect your child.