Here it is, the new year already. It’s time to work on all those New Year’s resolutions: Lose weight, stop smoking, exercise more, get out of debt. The list can go on and on. Some resolutions might even include trying to be better prepared for your future or your loved ones’ future.
I was talking with a friend of mine about writing an article for the newspaper and he said, “Why don’t you write about the way to protect your kids and grandkids’ whole life with whole life insurance? Doing that for my kids was one of the best decisions I made.” I appreciated his input and decided that since it is the beginning of a new year that in order to make decisions about your kids’ future, you need as much information as you can get. Here is some of that information.
First of all, what is whole life insurance? It is a life insurance policy with guaranteed death benefits, guaranteed interest rates on the cash build-up, and guaranteed premiums for the life of the policy. Once the policy is approved and issued, it cannot be changed by the insurance company. The premium you pay today will be the same premium you will be paying the rest of your life, unless you change the plan.
While whole life insurance tends to have higher premium as compared to term insurance, it is very inexpensive for kids. This makes it very popular with parents for their kids, or grandparents for their grandkids. The premium on a one-year-old child will never change as that child gets older. Eighty years from now, for this exact policy, the rate would still be the same as when it was purchased.
I know that a lot of people do not want to talk about life insurance on their kids or grandkids, but the best time to consider this is while they are still kids. They are young and usually healthy. I actually am doing this on my 17-month-old granddaughter. A $25,000 whole life policy costs less than $10 per month. This rate and the death benefit are guaranteed for the rest of her life. At sometime in the future, either her mother or she will take over the premium payments that will still be less than $10 per month. If she would choose not to continue to pay the premium payments, she would get whatever cash value had built up in the policy.
Is this the only planning that should be done on your children’s future? Of course not, but it is one of the ways available to start to prepare for their future. By placing a whole life insurance plan on your kids and/or grandkids, you have locked in their premium and their coverage (face amount) for their whole life. You have also set up a vehicle to start building cash value.
This is just one of the many ways to take a step toward setting up their future. Get with your local independent insurance agent and inquire about whole life insurance for your kids and grandkids.
Kim Cummins, the life and health specialist for Des Champs & Gregory, Inc., specializes in individual life and health, and employee benefit plans. He can be reached at 748-1812.
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