Life Insurance for My Son

As with all policies, a life insurance policy for your son should be purchased as early in his life as possible. If you're young or have other financial obligations at the time your son is born, you may want to wait a year or two so that premiums will not deplete the cash you need for other expenditures. If you're short on cash, a grandparent, aunt or uncle can always purchase a life insurance policy for your son if you are not able to do so. He or she will be the owner and beneficiary of the policy until your son reaches the age of majority. Regardless of who purchases the policy, it will grow tax-deferred and can provide a lifetime of savings.

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What Types of Life Insurance Policies are Available for My Son?

Life insurance for your son can be purchased as term life or as permanent life. A single premium term policy will usually cover your son until he reaches the age of 21. The coverage amount usually starts as low as $2,500 but can be as high as $15,000. The coverage amount will vary among life insurance companies. Term life for your son will contain the same drawbacks that term life policies for adults contain: Coverage ends when the term ends. Most companies will allow a conversion from a term policy to a permanent policy when he turns 21 or he reaches the age of majority as defined by his state.

The premiums on the new permanent policy will be more expensive than they were for the original term policy. They'll also be higher than they would be if a permanent life policy had been purchased for him initially. If you can, buy the largest permanent policy you can comfortably afford as soon as you can to avoid substantial increases in the future. In doing so, the cost to your son, even after he reaches adulthood, will remain affordable.

A Life Insurance Policy for My Son

A life insurance policy for your son, also known as a juvenile policy, is a policy that is purchased by you to insure his life. You, however, actually own the policy until your son reaches what is known legally as the age of majority. (Each state determines the age of majority for the insurance policies written in that state.) Once your son reaches the age of majority in the state in which he lives, ownership of the policy will be transferred to him. He then has the option to keep the policy in force by paying the premiums or he can choose to surrender it for any available cash that has grown in the cash account.

As the parent and owner of the insurance policy, the beneficiary of the policy is you. If your son were to die while the policy was in force, the amount of the death benefit would be paid to you. Once ownership of the policy is transferred to him at the age of majority, he is free, however, to name the beneficiary of his choice. He can continue the policy with you as the beneficiary, or he can name a grandparent, sibling, charity or his own children as beneficiaries. This is often why juvenile life insurance policies are referred to as gifts that last a lifetime. As long as the premiums are paid when they are due, the policy will remain in force, even for a lifetime.

The youngest age at which a life insurance policy for your son can be issued differs among life insurance companies. However, 16 weeks is typical. The oldest age at which a policy can be issued also differs among life insurance companies and the states in which they do business, but it is usually not past the age of 21.

What are the Benefits of Life Insurance for My Son?

A life insurance policy purchased for your son can provide valuable protection for his entire life. A policy purchased by you today can remain in force for as long as he wishes it to. A permanent life insurance policy that allows for investment growth and the opportunity to build cash value over time can provide cash for a college education or the down payment on a first house.

The cash-building feature of a permanent policy grows tax-deferred. A tax-deferred account can grow significantly faster than a taxed account, because money is not removed from the account to pay taxes. More money remains in the account to earn interest and compound over a longer period of time. If your son needs cash but does not want to surrender the policy, he can borrow against it to pay tuition, buy a house or a business. The value of the policy can also be used as collateral for most other kinds of loans. This investment can also help to provide him with a secure retirement. In later years, the death benefit can be used to help protect your son's children, if they are named as beneficiaries on his policy.

The premiums due for your son's life insurance policy will be the lowest possible rates available. Because he is in the healthiest and least risky segment of the life insurance pool, the premiums charged for his policy will be less than premiums will be at any other point in his life. A policy purchased early in his life will also ensure that he is insurable later in life. Childhood illnesses like asthma will likely trigger higher premiums both later in childhood and later in life.

Once the policy for your son is issued, the insurance company will not cancel it as long as the premiums are paid. Most life insurance companies will also suggest a rider to the policy that enables the owner of the policy, either you or your son once he has reached the age of majority, to purchase additional coverage at specified times in his life, regardless of his insurability at that particular time.

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