Life Insurence Lessons

Term life insurance is a purely temporary protection measure. It is typically only purchased for children to provide cover for funeral expenses in case the tragedy of a child dying should occur. Premiums for term life policies will increase with each renewal, and as no cash value is accumulated, there is no possibility of a future benefit for the child later on. Whole life insurance, on the other hand, will not only provide a death benefit in case of the unspeakable happening, it will also provide an investment from which the child may benefit as it gets older.

Purchasing a whole life policy while the child is young will be far less expensive than purchasing it later in life. A cash value will begin to build up from the end of the third year after the policy came into force. If an informed decision to purchase a whole life policy with the right face value is made, by the age of 65 it will provide a reasonable retirement fund.

Alternatively, a policy such as this may come in handy to provide college or university fees. Whatever the ultimate intent, it is advisable to secure and compare quotes from a variety of insurance companies. It is likely that different companies will charge very different premiums for the same face value.

Policy details, such as duration, dividends, surrender values etc should also be carefully compared. As it stands, purchasing a whole life policy with as much coverage as can be afforded for a child will benefit the child and possibly even his or her family long after the parents have gone.

What better legacy could a parent possibly provide for their child, while simultaneously gaining a lifelong peace of mind that their child’s financial future is secure no matter what happens.