September 7, 2023

Most people think of purchasing life insurance for themselves as a way to make sure their family is protected financially should the unexpected happen. Because of this, many people tend to overlook the idea of purchasing life insurance for their children. After all, why would your kids need it when they’re young and healthy, right? Plus, let’s admit it, talking about this topic can make people a bit uncomfortable.

But here’s what you need to know: getting life insurance for your kids while they’re young can actually be a huge favor that pays off big time in the future. 

In this article, we’ll uncover the reasons why securing life insurance for your children is a smart move, and how our dedicated, local agents at Farm Bureau of Tennessee can assist you every step of the way. We want you to understand how life insurance can bring you peace of mind and give your family the financial protection it truly deserves. So, let’s dive in and discover all the benefits of purchasing life insurance policies for your little ones.

What is Life Insurance for Children

When it comes to getting life insurance policies for children, you may be wondering what exactly that entails. Let’s shed some light on the topic and answer a few key questions.

First, who purchases these policies?

Generally, it’s the parents or legal guardians who acquire life insurance for their children. They recognize the importance of safeguarding their child’s future and want to ensure financial protection for their loved ones.

Next, let’s talk about the duration of these policies.

Life insurance policies for children often last for a long time, extending well into adulthood. They are designed to provide coverage throughout the child’s life, offering a sense of security and financial stability.

Now, let’s talk about the type of life insurance these policies fall under.

Most commonly, life insurance for children is in the form of whole life insurance. This type of policy provides both a death benefit and a cash value component. It offers lifelong coverage, as long as the premiums are paid, and it builds cash value over time that can be utilized for various purposes later in life.

Whole life insurance for children serves as a valuable asset, providing a foundation for their financial well-being. It can help fund future expenses such as education, a down payment on a home, or even starting a business. Additionally, some policies allow for potential increases in coverage as the child grows, ensuring their evolving needs are met.

What’s the Difference Between Life Insurance for Children and Child Life Insurance Riders?

It’s important to distinguish between life insurance for children and child life insurance riders, as they serve different purposes. Life insurance is a standalone policy specifically designed to provide coverage and financial protection for the child throughout their lifetime. As we’ve discussed, it offers a death benefit and builds cash value over time, offering long-term security and potential financial benefits.

On the other hand, child insurance riders are add-ons or enhancements to an existing life insurance policy purchased by an adult. These riders provide coverage for the child in addition to the primary policyholder. They typically offer a smaller amount of coverage compared to a standalone policy for children. Child insurance riders are often more affordable and can be a convenient way to extend some protection to the child within the parent’s existing life insurance plan.

Benefits of Life Insurance for Your Child

Lock in an Affordable Rate

People too often realize the need for life insurance when their health has already declined, making it difficult or nearly impossible to purchase. By seeking life insurance when you’re perfectly healthy, you can lock in an affordable rate that doesn’t change, even if your health declines. You’re never as healthy as you are when you’re young, so you could lock in a great rate for your child that he or she may not be able to obtain down the road.

Acts as a Savings Account

Another benefit is that the purchase of a whole life insurance policy could build cash value over the entirety of your child’s lifetime, so the earlier you start the better. That’s money your child could one day use to pay for things like college tuition, a down payment on a home, or a wedding if the need arises.

Can Make it Easier to Get Additional Coverage Later

Child life insurance policies often come with a valuable feature known as a guaranteed purchase option. This means that in the future, the child can obtain additional coverage without the need to go through a medical exam for life insurance. This option can prove incredibly helpful if the child develops chronic health conditions or decides to pursue a potentially risky profession. It's worth noting that individuals with health issues or hazardous occupations often face higher premiums compared to the average cost of life insurance. Having the option to secure additional coverage without the hassle of a medical exam can provide peace of mind and financial protection for your child, regardless of the path they choose in life.

Covers Costs if a Child Were to Pass

Life insurance policies for children offer a crucial safeguard by providing coverage in the unfortunate event of a child’s passing. While it may be difficult to think about such circumstances, having this coverage can help alleviate the financial burden that arises during such a challenging time. In the event of a child’s untimely death, the life insurance policy pays out a death benefit to the designated beneficiaries, typically the parents or legal guardians. This financial support can assist with funeral expenses, medical bills, counseling services, and any other unforeseen costs that may arise. By having life insurance for children, families can focus on grieving and healing without the added worry of overwhelming financial obligations during an already difficult period. 

Discover Whole Life Insurance Policies for Your Family

Buying life insurance for a child is about more than just insuring your child’s life. It’s a financial decision that could benefit him or her down the road in many ways. At Farm Bureau Insurance of Tennessee, we understand the importance of protecting your family's well-being. Our dedicated agents, spread across every county in Tennessee, are here to guide you through the various life insurance options available. Let us assist you in making the right decision for your loved ones.

Interested In Learning More About Life Insurance?

Explore life insurance options from Farm Bureau Insurance of Tennessee or reach out to a local agent.