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Secure Your Child's Future With a Child Whole Life Insurance Policy

By Dory Rodriguez on January 14th, 2010

Some of the wonderful thoughts that come to mind as you think of your children are their innocent smiles, sweet laughs, and unlimited energy. Do you often wonder who they may become as adults, and whether they will have the financial capability to fulfill their dreams?

Child whole life insurance is a way that you can provide a foundation for your child's future and help them realize their dreams.

Child Whole Life Insurance Is a Gift

Child whole life insurance is a gift for life, a gift that your child cannot not outgrow. The policy, which is typically owned by a parent or grandparent, can build substantial cash value, tax-deferred, at a guaranteed annual interest rate.

If a future need should arise, your child has the option to either take a loan from, or surrender the policy for the accumulated cash value. The cash value might be used to pay for educational expenses, a down payment on a first home, a wedding, or even to help supplement retirement.

Lock in a Low Premium Rate

The whole life policy annual premium rate that you start with today should be the same annual premium amount for life. Regardless of your child's age, occupation, or health condition the rate should always remain the same.

By obtaining whole life insurance for your child now, you can have the peace of mind to know that regardless of a future illness you secured the lower premium while your child was in good health. Once the policy is issued, and as long as the premiums are paid, the policy cannot be canceled.

What if Your Child Is Not in Optimal Health

Some life insurance companies offer guaranteed-issue child whole life, which does not require a health history review. However, if your child is healthy, it might make sense to go through the health questions because the policy premium may be significantly lower.

Secure the Future Insurability of Your Child

Many child whole life policies offer guaranteed future insurability options, which kick in around age 22 and typically allow for periodic increases up to a certain age.

For example, a $100,000 whole life policy may allow for a $50,000 increases at age 22, and every 3 years until age 40. Over time, this may allow your child to go from a $100,000 to $450,000 of death benefit without a health review. Keep in mind that the premium payments would increase for the additional insurance added.

Consider Insuring Your Child By Adding a Child Term Rider to Your Own Policy

As a parent, you might also consider adding a child term rider to your own life insurance policy. This is term insurance coverage on your children that can be converted to a child whole life policy at a later date. Typically, this coverage is based on the youngest child's date of birth, and provides protection for all of your children.

This strategy ensures that your child won't have to worry about health issues later on when converting the term policy to a whole life policy.

Consider whole life insurance for child today. The annual premium for a 25 year old is a higher than premiums for a one year old--you and your child could be missing out on 24 years of compounding cash value growth.

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