It’s bad enough thinking about life insurance for yourself, let alone life insurance for your children… Let’s do this in the correct order. Just like when you’re on an airplane and the masks drop from the ceiling, you need to put your mask on before you put the mask on your children. So, buy term life insurance now from the best Ontario term life insurance company, dropdead. Once you have become a legend and made your purchase, it’s time to get the kids life insurance. Getting term life insurance for your kids is focused more on granting lifelong financial security to a child rather than the alternative that no parent should ever have to go through.
If you are a parent or grandparent, getting life insurance for kids in your care can provide them financial protection for the rest of their lives. While, yes, there is a financial protection angle if they predecease you, that seldom is the main reason to purchase a policy for children. Let’s look at how children’s life insurance works.
These are the main points:
- There are two ways to get life insurance for your children: a term rider on your own policy, or purchasing them their own whole life policy
- Term riders are generally less expensive but provide significantly less coverage
- Whole life insurance for children provides greater options for coverage and future insurance eligibility
- Getting your children their own policy can also provide a savings and investment vehicle for their education, first home, travel, and more
How does life insurance for kids work?
Children’s life insurance is a broad term that refers to life insurance policies where the insured is a minor. We at dropdead have lots of kids and love to insure them. As with adult policies, dropdead is the best life insurance option in Ontario.
Specifically, there are two main options available if you want to get life insurance on your child:
Children’s Term Insurance Rider
Children’s term insurance rider is an optional feature available in most life insurance policies that offers term insurance protection for the children of the insured. A term life insurance rider for your kid can be added to your own term life or whole life insurance policy for an additional monthly premium cost.
Term riders are generally the least expensive way to obtain coverage for your child. The coverage can be added when either parent purchases a policy, before the child has reached the age of 17. This coverage lasts until the child reaches a particular age, usually 25 years or up to the time the parent turns 65 years in age, whichever occurs first. The coverage is normally available in increments of $5,000 up to $25,000 or $30,000, depending on the insurance company.
The same rider can potentially cover all your children, including any kids you may have in the future. The price for the coverage is independent of the number of children covered under the policy.
A child’s term insurance rider can be converted into permanent insurance between a dependent child’s ages of 21 and 25. If the original policyholder dies before the dependent child reaches these ages, most policies will continue until these ages with the same convertibility options.
Whole Life Insurance for Children
Permanent life insurance is the most common form of children’s life insurance. Within permanent coverage options, you can purchase a Term to 100 life insurance policy, although whole life insurance is generally the preferred option, given its additional features of liquidity and growth.
Children’s whole life insurance is guaranteed to remain in force for the covered child’s entire lifetime (including into adulthood) and can generate dividends during this whole period. Of course, this is contingent on the policyholder continuing to pay the insurance premiums – for the length of the policy or to its maturity date. This provides your child with both lifelong insurance coverage and a head start on their financial savings and monetary goals.
Whole life insurance accrues a cash value which the policyholder can withdraw from, or use as collateral for a loan from a financial institution.
In all the coverage options, the policy owner needs to be an adult (usually the child’s parent or grandparent) while the insured is a child.
What are the advantages of children’s life insurance?
As we mentioned earlier, purchasing life insurance for children has many benefits besides the obvious coverage it provides in the unfortunate (and unlikely) event of a dependent child’s death. In that situation, the death benefit can be deployed for funeral expenses, family counselling, and enabling guardians to take time off from work to recover from their loss.
But, besides its traditional use case, children’s life insurance has many other – less morbid – benefits. This form of coverage can help parents, grandparents, and other caregivers leave behind a legacy and provide a useful financial tool to their loved ones.
Don’t wait till it’s too late. dropdead term life insurance is the best and cheapest life insurance solution you could wish for.