You Can Buy Child Whole Life Insurance
Child whole life insurance is a tremendous gift for your child. A whole life policy covers your child for life, and establishes they can get insurance throughout their lifetime, no matter if they choose a high risk occupation or suffer a major illness or injury. Whole life insurance is meant to be a permanent lifelong type of life insurance, and the premiums are fixed for the life of the policy, so you’ll always know what you’ll pay every month for your child’s insurance. Whole life also pays premiums on the amount you pay every year, so it can grow to be quite a substantial amount for your child’s beneficiaries. Some policies pay dividends on top of the premiums, too.
The Advantages of Child Whole Life Insurance
Whole life insurance will follow your child for life, the premiums will gain interest, and your child will never have to worry about getting life insurance as long as the premiums are paid. The interest the life insurance company pays on your premiums is also tax deferred, and in some cases, your child can borrow against it once it builds up. Whole life policies can’t be cancelled for any reason – unless the premiums aren’t paid, so they cover your child in any event.
The Disadvantages of Child Whole Life Insurance
Whole life insurance is extremely expensive, much more so than more affordable term life insurance. Many experts feel that the whole life policies don’t pay as much in interest as many other traditional forms of investments (like a 401K), and they take quite a while to build up any cash value (at least 10 years). So, it really depends on your needs, and how you view your child’s future to decide if you should purchase a child life insurance policy. With whole life, the premiums may be too high to get the coverage you really want for your child. Don’t sacrifice coverage for cost. Instead, invest in a term life policy with greater coverage that you can afford.
Even if you don’t choose a child whole life insurance policy for your new baby, consider investing in a term life policy that can be renewed into adulthood. It’s a way to start your child’s future off with some security and investment that can follow them into the future.