Life insurance for children has become an enormously popular gift in financial planning.
Parents purchase life insurance for their children, and grandparents buy life insurance for their grandchildren.
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The reason is simple: no other financial tool has the potential to save the children as much money over their lifetime, as does life insurance! A policy purchased on a child or teen can lock in a very low premium, and stay guaranteed at that rate for life.
People that have had to purchase life insurance in their adult years know how high the cost can be - especially if they've been treated for an illness. Even common conditions such as mild depression or diabetes can significantly increase the cost.
This problem can be avoided by putting coverage in force on the child as an infant, grade-schooler or teenager. The financial benefits are clear.
What is interesting to me is the difficulty some people have in communicating the value of this gift to the children. It is, after all, a sensitive topic, and one that requires some deeper thought about caring for loved ones.
To help educate the children, I actually make a little speech when the application is signed. (Infants usually sleep through it, but some do seem to enjoy it. Surprisingly, teens find it to be cool!)
It's a bit mushy but it definitely gets the message across. And the adult family member who's sponsoring the plan really appreciates it.
Next, I share my speech about teaching children the value of their life insurance gift.
Copyright © 2001-2008 by Steven H. Kobrin, LUTCF. All rights reserved.
Steven H. Kobrin, LUTCF, is an independent life insurance broker and recognized expert in the field, serving as a preferred life insurance quote provider for many professional advisors and their clients, including attorneys, accountants, financial planners, and loan officers.
Experienced at patiently helping people through the life insurance maze, Steve is glad to share his perspective with the public and he warmly welcomes all emails and phone calls from consumers and consumer advocates.