For too many people, the thought of buying life insurance for your newborns, toddlers, or high school aged kids is morbid and somehow immoral and wrong.
Don't listen to all that misinformation. I'm about to tell you why doing so is probably one of the best things you could do for your children. Ready?
First, let me calm your nerves: the purpose of buying life insurance for your kids is not to profit from their unfortunate early demise. As you well know, no amount of life insurance can make up for the loss of a loved one. That's not why you are buying it.
Well, if that's not why you are buying, what is the reason? Actually, the reasonS (plural). Let me explain.
1) As you may know, when you purchase whole life insurance, a cash value is also built up. Well, just like any investment, the longer period of time it has to build up, the greater value it will have. In other words, if you purchase whole life insurance for your kids, by the time they become adults, the cash value will already have grown to quite a substantial amount, which can be used for college, to help with a down payment, or in an emergency.
2) As you also many know, cash value life insurance is more expensive than term. However, the younger someone is when they apply for and are approved for whole life, the lower the monthly or annual premiums are for the exact same amount of coverage. In other words, you're doing your kids a huge favor by locking in low premium rates while they are still young.
3) But you're not only just locking in low premium rates. You're also locking in coverage. Most people are at their healthiest as children. With every passing year, a life-insurance-ineligible sickness or medical condition could develop. It's very sad when someone waits until they are older to apply for life insurance only to discover that the medical condition developed last year now makes him ineligible. Well, by securing whole life insurance while your children are still young and healthy, it ensures that they will be covered for life, regardless of what happens to them medically later in life.
4) You ensure that your kids have a legacy from the day they are born. In other words, your children will be able to help direct where the money goes upon their death. Perhaps they have a favorite charity, or they want to help support a family member. It provides a measure of financial responsibility to children that they otherwise wouldn't have, helping to develop basic financial skills, and instilling within them the importance of looking out for others.
5) Finally, it also ensures that they don't have to make the adult decision later of "Should I get some life insurance?" because you will have already helped show them that the answer is "Yes". Bottom line, doing this for your kids is simply good parenting.
So now you know the reason why purchasing whole life for your kids now (whatever their currents ages) is a smart decision. I wish my parents had done this for me when I was a kid. My premiums today would be exponentially lower (and I'd probably no longer even be paying for them), I'd have a huge pot of cash value at my disposal, and I'd be in an even better financial situation than I already am.
I’m hoping that if you’re reading this, you will be wiser than me: take my advice and get whole life insurance for your kids (and yourself) now. Don’t wait. The sooner you start will be another few thousand dollars added to your cash value, and another year of greater peace of mind accrued!
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