Do Your Children Need Their Own Life Insurance Policy in Los Angeles

If you ask a financial professional if you need to purchase life insurance for your children, you may get a muddled answer since there’s a great debate raging on over its usefulness. However, there are distinct benefits to buying this type of policy. This article discusses a few of the most important benefits that buying a life insurance policy can pass down to your children.

Many believe that the sole purpose of life insurance is to replace an income that is no longer flowing in. However, there are other economic factors that should be considered when purchasing life insurance besides income replacement, which does not apply to most children. These include:

• Funeral expenses can cost over $10,000 after the services, casket and headstone. While no one wants to think of their child dying, a life insurance policy can at least ease the financial burden.
• If an unfortunate event leads to the death of your child, would you be able to resume work? Many parents would need some time off and, therefore, a way to continue paying for living expenses.
• The parents of a deceased child may also need counseling in order to grieve their loss without hurting their own health, which may cost more than the couple currently budgets for.
• Many parents choose to start a charity in the name of their deceased child in order to help other children in need, which takes startup capital.

In addition to what a child’s life insurance policy can do to help surviving parents, these policies also have several benefits for the more likely event that a child lives well into adulthood. These include:

• Being insured early on guarantees that, as an adult, your child won’t be faced with the problem of being uninsurable due to a family history of medical problems or a medical condition that may develop as your child ages (being underwritten at an early age can prevent insurance increased costs as well). To protect your child’s insurability, buy a life insurance policy that is renewable.
• Life insurance is most beneficial if you buy it long before you need it, but many young adults simply don’t think about their need for it. Supplying your children with coverage early on, even if they don’t recognize the value, is a good way to protect them and their future.
• If you buy a whole life insurance policy for your child, it will accumulate cash value over time. After years of premium payments, your child may have enough cash value to redeem for college tuition or a new home.
• Many young adults have a hard time taking out a loan because they lack a credit history. But, they can borrow against a life insurance policy’s cash value, tax-free. After which, your children will have the option of either restoring their policies or opting to stick with the lowered death benefit.

Purchasing life insurance for your children is an important part of you and your spouse’s financial planning that deserves your consideration. Speak with your trusted insurance agent for guidance through the decision and buying process.