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Is there any really good reason to buy life insurance on dependent non-working children?

Term Life Insurance & Whole Life Insurance Discussion

Is there any really good reason to buy life insurance on dependent non-working children?

Postby diederich61 » Fri Jan 20, 2012 9:38 am

If you do have a dependent child, you probably need life insurance. You should consider getting term life insurance. You can get more coverage for your money than any other type of life insurance. If you want to put a small coverage on your child, just add a child rider to your policy. A child rider covers all your children from age 4 days old to 25 years old.
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Is there any really good reason to buy life insurance on dependent non-working children?

Postby baldwinn » Fri Jan 20, 2012 9:48 am

With life insurance the sooner you lock in coverage the cheaper it is and you eliminate the risk of becoming ineligible later on should a health complication develop.

My mother used an old IRA she had sitting around losing money - converted it over to a whole life policy for my daughter...her 40K IRA will become more than 700K cash value (age 65) when my daughter is retirement age...will have life coverage her whole life and will have a death benefit of 1.4 million at age 65 that will continue to grow for life. She can tap that or leave it to her family tax free upon her eventual death.

Meanwhile should my mother need to access the cash to perhaps supplement her retirement for some reason - the money grows tax free and can be accessed tax free.

For parents, grandparents with health issues or who just want to leave something behind even a small amount will grow given the timeline and steady growth of the policy.

It doesnt replace an entire portfolio but its an asset class for a reason - it creates an instant estate...the 40K bought an immediate 360k coverage that grew to 1.4 million with ZERO premium after the initial 40K purchase.

Remember that besides the cash growing the company also pays policy holders a dividend yearly - the larger the cash value the larger the dividend (stake in the company) The dividend rates have hovered around 7-8% this last decade for this policy.

Talk to an agent - look at the illustrations for yourself - its an important part of a balanced portfolio....tax free growth AND distributions - when you retire the distributions are very important
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Is there any really good reason to buy life insurance on dependent non-working children?

Postby darrill » Fri Jan 20, 2012 9:58 am

Burial expenses is the best reason, but the best way is likely just a rider on your own policy. As far as locking in rates goes, generally no company will issue preferred rates to a child, so that's not necessarily a good argument UNLESS the child develops a condition....which would be the other reason.
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Is there any really good reason to buy life insurance on dependent non-working children?

Postby lyman » Fri Jan 20, 2012 10:01 am

Yes. The reason is so that the insurance agent selling the insurance can make money by selling the insurance. That is why most life insurance is bought: because the agents selling it need someone to buy it, not because the person buying it has any use for it.
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Is there any really good reason to buy life insurance on dependent non-working children?

Postby alphonsus » Fri Jan 20, 2012 10:03 am

None whatsoever, unless your financial situation is so desperate that you wouldn't even be able to afford a funeral if something happened -- but in that case, there's probably much better things you could be spending your money on instead of insurance premiums.
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Is there any really good reason to buy life insurance on dependent non-working children?

Postby navarre » Fri Jan 20, 2012 10:12 am

These policies are sold so that you will have money for funeral expenses if your child dies. The chances of that happening are really pretty remote. I would not waste my money
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