Adding a Child to a Life Insurance Policy
Adding a child to a life insurance policy can go a long way in helping them plan for the future financially. In fact, this is a financial planning gift you can give them from the moment they are born. They will be able to do more than was originally possible simply because you have given them a policy like this, and will have more options when they get old enough to take advantage of the various options. Whether they choose to go to college or immediately start working, this is something that will give them a bit of a cash nest egg to start working with and not require them to have a large amount to put down first.
Benefits of Cash Savings
There may also be a myriad of ways for them to use this cash if they get into a tight spot. Depending on what their needs are at the time, it can be a great way to help them pay for school, purchase a car, get a place of their own, or just transfer the amount into a different kind of savings account. These are all options to consider when you're ready for them to take the policy over under their own names. It might even help them if they are trying to get a loan of sorts because they can show they have cash collateral to back up the amount, even if they don't have a large credit history built up yet.
Another benefit of choosing childrens life insurance or adding your child to your policy is that they can lock in a low payment rate to pay each month. Instead of being vulnerable to rate increases that other clients might be affected by, you can make sure they have a low number to begin with and it will just continue on from that point. This is going to help them very much if they are working on the fixed income of a student or someone who is just starting out on their own. When you don't have a credit history built up, it's hard to qualify for these lower rates and usually they have to be earned after years of having consistent payment history.
Pre-Existing Conditions Inclusion
Because they have already been included on a policy, they will not be excluded due to pre-existing conditions that might preclude them from obtaining coverage on their own. Or if they were to receive coverage, they may be paying higher rates due to these situations they are dealing with. Signing them up early will prevent them from having to overpay for the same coverage they are obtaining through you as their parent. If they turn out to be a little less than healthy, then they will appreciate this help as they get older and realize its worth.
When you are going to be adding a child to a life insurance policy, then make sure you shop around for the best rates. Even if you already have coverage with a company, it's always worth the time it takes to see what the competitors are charging each month. Financial planning like this can be very effective in making sure that you're paying the right amount and not missing out on a potentially lower rate for your life insurance protection, as well as that of your child. You may be surprised to find there are special trends going on that have to do with your particular plan and might experience a large decrease in what you are paying each month.