This week in Fond du Lac Child Life Insurance Questions, we received several inquiries on life insurance for a child. The info below should be very helpful.
Question 1: My son just had a baby boy. I’m a grandparent! Is it a good idea to buy a policy for my grandchild?
Answer: This is a great gift. One company we partner with has a simple child policy, also known as a jumping juvenile, which increases it’s coverage when the child turns 18 and 25 years old. It’s a whole life product, which means it’s permanent insurance which will keep it’s premium cost until death. An example, a newborn policy which starts at $10,000 coverage, jumps to $15,000 at age 18, and jumps to $20,000 at age 25 costs $73/year or $6.27/month!
This is a great value. When this young man is 80 years old, his policy still costs $73/year. In comparison, an 80 year old buying a new policy would be charged over $2,600/year. The policy can be surrendered for it’s cash value any time and, should the worst case happen, it’ll help pay for funeral expenses and a legacy.
Question 2: What options are there for my newborn baby?
Option 1: Jumping juvenile policy mentioned above. Starts at $10,000 coverage and jumps to $20,000 coverage. It’s a whole life product for under $100/year.
Option 2: Single Pay Whole Life. Pay about $1,700 today and never pay again for this $20,000 coverage whole life policy.
Option 3: Everything else. There are many ways to insure newborns. Call a Behnke Insurance professional for ideas at 920-922-3850.
Question 3: How does ownership work with baby insurance policies?
Answer: You can be the policyholder. You designate the baby as the insured. You select a beneficiary. Down the line, you can transfer ownership from yourself to the baby, perhaps when he’s an adult.