Three Reasons to Purchase Life Insurance on a Child

This report is from the fine folks at MTL. They are the most innovative insurance Co. I know of. In a future blog I will tell you of some personal experiences with our policies and children that may make you wonder if buying term is really a smart thing.
Although opinions differ on whether to buy a life
insurance policy on a child, there are three advantages
for buying a whole life policy. First is the lower,
level premium. Second is that purchasing a life
insurance policy on an infant or child protects the
child against the unexpected events that may occur in
life. And third, the policy offers the child an early
start to saving.

1. Lower, Level Premium
In the unfortunate event that a child is diagnosed with
a life-threatening illness or has a critical accident
early in life, a life insurance policy can provide
sufficient proceeds to cover final expenses. For many
families, the prospect of paying these expenses
out-of-pocket would be problematic. The relatively low
cost of life insurance for children can be an effective
way of providing peace of mind regarding these
unexpected expenses. MTL’s Children’s Insurance Rider
can be added to a parent’s whole life policy on all
children named in the application who are less than 20
years old.

2. Insuring Coverage in the Future
We all know that life insurance can help shield a family
against the possibility of loss that can result in an
uncertain world, but shouldn’t our children have these
same opportunities? When MTL’s Guaranteed Purchase
Option (GPO) Rider is added to a child’s policy, the GPO
creates the guarantee of additional death benefit
protection without evidence of insurability. Thus, in
the event that the insured child should become
uninsurable, the GPO option can be monumental in
protecting the financial future of the insured and his
or her loved ones in the future.

Here’s how the GPO works. It enables the child to
exercise regular increase options to purchase additional
insurance upon written request, on or within 31 days
before each policy anniversary nearest the age of 22,
25, 28, 31, 34, 37, or 40. Although these are regular
increase options, the policyowner can choose to
customize this option, advancing the next option date
upon marriage, or the birth or adoption of a child. A
customized option may be substituted for all options,
except the last one, at age 40, and must be exercised
within 91 days of the event. When this alternative,
customized option is used, it replaces the next
scheduled option. MTL’s Guaranteed Purchase Option can
be added to all MTL life insurance products, except
Legacy One, and is available for all issue ages 0
through 35.

3. Saving for the Future
Purchasing a Covenant II policy with a Maximum
Accumulation Dividend® option on a child can, over the
years, build cash value that the child can use on a
tax-favored basis throughout life. Maximum Accumulation
Dividend® is unique to MTL Insurance Company. In
combination with MTL’s Annual Premium Paid-Up Additional
Insurance Rider, it helps maximize the cash accumulation
in a whole life insurance contract while still
maintaining its tax-favored status. This Covenant II
policy can be gifted to the child upon graduation from
college or when the child becomes an adult, and the
child can continue the plan, making the premium
payments.

About Marilee

Marilee is a self employed Financial Designer. That means it is her business to make peoples financial living space beautiful and functional with the ability to adapt and last a lifetime. If you have reached this site you are either a relative, friend , or business associate. I have had this blog for about two years. I wanted a place for expressing my thought, sharing information, and just letting my hair down. I hope you find some of my post interesting, informative, or even entertaining. Please feel free to register and comment, it will only make the blog better.
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