The Pros and Cons of Juvenile Life Insurance

The Pros and Cons of Juvenile Life Insurance

A debate that is common in the life insurance industry sparks the question about life insurance for children and infants: Do you need it? Is it worth it? Most insurance Agents and financial professionals can agree on one thing: Be sure the other critical financial obligations have been met such as a savings account, life insurance policies for the parents, and the juvenile’s higher education fund. Once these obligations are met, the parents should consider additional financial security for their children.

IS THERE LIFE INSURANCE FOR CHILDREN?
Yes. You would most likely be able to find a child’s coverage through a whole life or juvenile life insurance policy. Usually, these policies have smaller benefits ranging from $1,000 to $25,000 or more, and can be activated from the first day the child is born and last the child’s entire life.

Some companies may offer a child “rider” option to you or your spouse’s policy. The child is added to the parent’s policy at an additional cost and gets his or her own benefit, typically a smaller amount. If you’re considering adding a rider to your policy, be sure to check the age requirement, which may change for every company.

JUVENILE LIFE INSURANCE PROS
Despite the different companies’ policy benefits amounts and buying process, life insurance for a child can be very valuable.

• FINAL EXPENSE COVERAGE
  In the event of a parent’s worst nightmare, a final expense payout can cover a child’s funeral, fund family grieving counseling, and supplement income for the parents’ time away from work.
• CHILDREN CAN BE GUARANTEED INSURABLE
  While adults who buy life insurance have to consider their health, health history, family health history, and lifestyle habits, most newborns and children are the youngest and healthiest they’ll ever be in their life, therefore they can be easier to insure.
• POLICIES CAN BE INEXPENSIVE
  In addition to easy qualifying, children can have the lowest premiums rates on the market. Most companies lock in a child’s premium rate, meaning the child will be protected from rate increases that correspond with age and health overtime. This means a less expensive policy for the same coverage.
• CASH VALUE BENEFIT
  Life insurance policies with cash value benefits are attractive because later on in life, your child can take out a loan from his or her policy for college, a wedding, or other major life purchases, should he or she need to. Be sure to inform your child about the heavy consideration a loan policy comes with.

JUVENILE LIFE INSURANCE CONS
Some financial professionals are skeptical about juvenile life insurance policies for a few reasons.

• LOW CHILD MORTALITY RATES
  According to the CDC, approximately 12,000 children and young adults, ages 1 to 19 years, die from unintentional injuries each year. While most skeptics would use this to prove child death is unlikely, this number only includes unintentional injuries, not cancer and other critical illnesses.
• HEALTHY ADULTS ARE INSURABLE
  As we see above, a juvenile life policy is attractive because you could lock in the rate while the child is young. Those against juvenile life insurance argue most adults in their 20s to 30s are insurable.

While securing financial coverage for their children is a priority for some parents, it may not be to others. There is no “one size fits all” when it comes to insurance. Any life insurance purchase comes with heavy consideration and those looking to buy should be well informed about their purchase.