The insurance sales man is yapping away about this and that of the benefits of life insurance for all the family and for your beloved children.
One thing that motivates parents to diligently pay even exorbitant premiums to insurance companies doesn’t have anything to do most times with death benefits, but the desire to be remembered by loved ones for doing something noble, something heroic and something angelic (Divine).
The trill that policyholders have when they think that even at their death, family members left behind will be adequately taken care of and not be left destitute for lack of funds, because at death, the insurance companies are obligated to pay claims to the beneficiary.
Now what makes up the claims?
1. Cash value:
The cash value is the amount the policyholder had built up within the policy during the time the policy was active. This fund can sometimes be referred to as: account value, policyholder’s equity or surrender value.
Life insurance amount is the death proceed, benefit or the amount at risk. This amount is much more than the total premium paid when the policy was active.
The total makes up the claim.
From the above it is clear that life insurance is for income earners.
In spit of repeated argument and posers that tends to discourage the purchase of life insurance for kids, many parents still find it worth while buying life insurance for their children. Now, why do parents still do this? They love their kids and because they care about them and are willing to stake something valuable on their behalf.
If you are determined to get an insurance policy for your kids you’re not alone in this venture, other well meaning parents are doing this and I wouldn’t want to stop you if it makes you feel good, however, you must insist on buying a maximum protection low cost Term life insurance because the premium is low and also affordable but as their ages increase, so does the premium. When the time comes that the premium is becomes monstrous check out other options.
It may not be a sweet advice to buy insurance for your kids because it defeats the sole purpose of life insurance which is protecting the bread winner or in another better way protecting dependents from loss of livelihood. More so, kids hardly bring in income, it becomes a bad idea to buy one in their favor. However if a parent wants something for the children future they could put it in annuity or other investment vehicles.
For further tips and advice for other investment options see Personal insurance for details
For the parents who don’t feel like being overt about life insurance for children and are conservative they must ensure adequate Health insurance coverage for the kids if the employment Medicare does not extend to their dependents. It will indeed be a costly venture to totally leave out your kids form every form of coverage.
Term life insurance could vary from:
1. Level premium term
2. Annual renewable term
3. Decreasing term
As a parent ensure that whatever investment choices you make in teams of insurance for children affects the over all well being of you family.