Until What Age Should You Have Life Insurance on Children?
Although life insurance for children is a controversial issue, there are practical reasons to buy life insurance for your child. Many insurers recommend purchasing a whole life or universal life insurance policy for children, from infancy to age 16. A child in good health has a good chance of being approved for life insurance and will qualify for the lowest premium rates.
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Whole Life
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Whole life insurance policies are available for children beginning in infancy. Coverage continues throughout the child's lifetime, as long as you make the premium payments. Purchasing life insurance for a child guarantees her future insurability, especially when there is a family history of health problems. The policyholder for a child can be a parent, grandparent or legal guardian. Many insurance companies offer the option of increasing the coverage amount of the policy without having to re-qualify. The premium rate will increase according to the amount of coverage. Some policyholders periodically choose more coverage to offset the effects of inflation. Before making a decision, you might want to inquire about term life insurance policies which are renewable, and which offer the option of converting to whole life insurance later on.
No Exam Required
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Purchasing a life insurance policy for a young child usually does not require a medical exam. The younger your child is when you apply for a policy, the less likely he is to have serious health problems or show symptoms of diseases that won't appear until later in life. Requiring no medical exam is an advantage, as the cost of life insurance increases significantly as an individual gets older. Rates are higher for applicants who have health conditions, no matter how minor.
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Premium Rates
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The monthly premium rate for life insurance is based on a child's age at the time you apply for coverage. Except for an introductory period, which often offers coverage at a lower rate, you pay the same monthly rate for life. The rate will never increase, despite future health problems or working in a hazardous occupation as an adult. Nor will the monthly premium ever increase because of age.
Future Insurability
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Buying a whole life insurance policy for a child provides continued coverage into adulthood. This is an essential factor to consider, since chronic health problems or being involved in a serious accident could make life insurance unaffordable to your child as an adult. In some cases, your adult child might not be able to get life insurance at all. Another alternative is to add a child rider to your own life insurance policy. The additional premium cost is minimal and, like a whole life policy for a child, the rider ensures that your child will qualify for life insurance when she is older --- even if she has health problems.
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References
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