You know a baby will change your life. Not only your daily life but your financial portfolio will also be affected as you take every measure to protect your child’s future.
Life insurance — especially term life, which is a policy that typically ends around the 65th birthday of the policyholder — is important. It is intended to cover costs like a mortgage, car payments, living expenses, and higher education until the child is sufficiently independent Term life policies can be complemented with universal or whole-life insurance, which ends at the policyholder’s death, often up to age 99.
A return-on-premium term life insurance policy is an attractive offering to many. It guarÂantees a return on the money invested at the end of the policy term (typically 20-30 years), as long as you pay your premium on time durÂing the life of the policy and do not go into cancellation. Many of these policies also have the option, at the end of the policy term, to convert the invested premium into a small, perÂmanent death benefit to cover final expenses, such as a funeral.
If you want to start your child off on the right financial foot, you may wish to secure a permanent life insurance policy for children. Typically, these are paid over the course of the child’s youth and can be (a) very affordable and (b) convertible to a larger amount of coverage when the child takes ownership of the policy upon reaching adulthood. This is a great gift for your children, who will now have guaranteed life insurance for the rest of their lives, even if they develop a condition or disease that would otherwise make life insurance unavailable or unaffordable.
