All children be insured for same amount

[Ivy Sheng]

Is "All children be insured for the same amount" an NAIC regulation for life policy? I read it somewhere but couldn't locate it. TIA!

 

[DHK]

First, I'm assuming minor-age children rather than adult-age children for estate equalization or business succession, etc.

Let's use some common sense:

• Is it possible that if you insure children for different amounts... that the child with the highest amount could be put at risk?
• What possible reason would there be for different amounts?

 

[Ivy Sheng]

First, I'm assuming minor-age children rather than adult-age children for estate equalization or business succession, etc.

Let's use some common sense:

• Is it possible that if you insure children for different amounts... that the child with the highest amount could be put at risk?
• What possible reason would there be for different amounts?

Thank you, DHK,
One of my wealthy clients was thinking about giving each of his 3 children a policy when they turn 18. But I have an impression of there is a requirement such as "All children be insured for the same amount" or similar, just can't remember if it is a carrier guideline or NAIC regulation. I need to figure it out before moving forward.

 

[Allen Trent]

Thank you, DHK,
One of my wealthy clients was thinking about giving each of his 3 children a policy when they turn 18. But I have an impression of there is a requirement such as "All children be insured for the same amount" or similar, just can't remember if it is a carrier guideline or NAIC regulation. I need to figure it out before moving forward.

Shouldn't be an issue as they are not minors at age 18. Will want to check carriers rules on insurable interest & max insurance amounts as multiplier of income, etc. Each carrier have different rules even if not an naic reg.

 

[Life Hawk]

First, I'm assuming minor-age children rather than adult-age children for estate equalization or business succession, etc.

Let's use some common sense:

• Is it possible that if you insure children for different amounts... that the child with the highest amount could be put at risk?
• What possible reason would there be for different amounts?

I'll go further than that... could it be that a child being requested for a higher amount be a risk themselves... or quickly headed that direction.

I have had this discussion before in homes... parents see a storm brewing for future. Tough conversations... but real life.

 

[pfg1]

I've done a fair amount of policies on minors. Most carriers like them to have similar amounts of ins, but it doesn't have to be exact. Many are quite flexible. For instance... client might want to buy $250/mo premium on each child. This will result in different size policies due to age differences. Most carriers are ok with that, when they understand the goal of the planning. Cover letters are your friend.