by Animesh p
Published Tue, Apr 11th 2017, 16:54 | Finance
GUARANTEED INSURABILITY
This is the number one reason to buy whole life insurance for your children, and the younger the age the better. We all know that premiums are a direct reflection of your age and your health; age zero and healthy is the best time to buy life insurance. Most insurers will allow you to purchase life insurance on an infant as soon as they have a Social Security Number, some even before that! So why would an infant need life insurance? Short answer, they don't. However, many insurance companies offer an additional benefit that can be purchased that gives you (or your child) the right to purchase more life insurance later in life without proving insurability. Typically this benefit allows for the purchase of double the original face amount (up to $250,000) seven times in your child's life! That's a possible $1,750,000 of additional life insurance, not counting the original policy, without having to prove they qualify medically. As your child becomes an adult and his insurance needs grow with the addition of a family, he will thank you.
DISCIPLINED SAVINGS
The most important financial advice we can give our children is the importance of discipline. Whole life insurance is a forced savings that teaches this discipline. Once your child is out of your house and on his own, turn the premium responsibilities over to him. He will take pride in the fact that his parents did something for him many years ago and will feel that pride while he continues paying the premiums. Besides pride, the tremendous growth of both the cash value and death benefit inside the policy will encourage the continuation of premium payments.
TAX-FREE GROWTH AND TAX-FREE WITHDRAWALS
The IRS guidelines for life insurance cash values state that the cash value will grow tax-free and if structured and maintained properly, withdrawals are also tax-free. This gives your children a bucket of money they have access to (assuming you've given them ownership) without taxes or penalties. Having different buckets of money is crucial to making it through difficult economic conditions.
POTENTIAL DOWNSIDE
Other factors should be considered before funding a life insurance policy for a Investment Plan For Child. Are you contributing money towards retirement accounts? Do you have enough money in an emergency fund? If your monthly debt to income ration at the right level? Do you have insurance on yourself and your spouse? Do you own disability insurance? If the answers to these questions are "no," then consider funding these higher priority items before purchasing insurance on your child.
SOURCE:- http://bit.ly/2oXk76X