Life Insurances on Kids

You could just not give them the policy and say, now that you're grown, I just want you to know, as an adult your burial money is already set aside and taken care of. Here's a copy of your policy.

I've got 20 pay $15000 policies on all 3 of my kids, by the time they're 80, they'll be worth around 30000 if dividends hold up. Should always have a paid funeral. One less thing to worry about.

Makes hellish good sense when you realize you prepaid 3500 for a funeral and guaranteed ability to buy life insurance. Especially when you figure you get a 360 dollar discount for being the agent.

When else is 3200 dollars worth 15000-30000. 4.5% growth over 50 years guaranteed isn't bad at all.
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Son, I'm proud of you, here's your new house. The mortgage is 1800 a month. Good luck paying it on your 10 dollar an hour job.
 
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Yes, the option to purchase more insurance is a necessary rider, IMHO, and I include it on all the policies I sell, as well as a waiver of premium. Also, we're not talking $300/month premiums - For $50/month you can get a decent WL policy. In 20yrs, that'll be like $25 or less in today's dollars - if the child is able bodied enough to work, and can't afford that premium, a) you have big problems and b) you can always convert it to a fully paid up policy.
 
My father-in-law has had a Mass agent for years. His agent always gave great advice. He took out a Whole Life Policy with Premiums Payable to Age 65 on both of his daughters while they were still young.

The transition went well. When my wife and I got married (way before I thought about becoming an agent), he told us why he bought it, what we could do with it, etc. We set it up so that we began paying the monthly premiums, and we are glad that we have this policy. She was 7 when it was first purchased.

Her sister took the cash value on her policy to help out on a down-payment on a house she just bought. We still have my wife's policy and are paying into it... we may take out a policy loan someday if we need to, but otherwise we are thankful for it and will continue letting it grow.

In short, if the parent explains why it was purchased, the kids should be able to handle it responsibly and won't regret having to pay $31 per month.
 
Good story! Also, don't forget about premium offset and/or reduced paid up if the $31 per month was ever a problem as some have suggested!
 
I know the debate about whether having insurance on kids is a financially sound idea or not. I am in the is camp. Below is a paragraph from an email. I had asked her if I could use it.
Background: I have two policies on her two other kids. (Orphans) And rewriting some old ULs on her and her husband. Her 20 year old son was killed in an auto accident.

“”No, Lee, this has been important to me since I was 14. Being 58 now, it is still important to me. And life insurance helped us get thru a very difficult year, in a financial way I never imagined. When my son died, we could not finish a sentence or a thought. Then we got sued the next year because of the accident. The $$ from the accidential death policy and the whole life policy paid our bills, when we could not function due to so much heartache. Explain this to your younger parents, as I did not know how awful life could be, but at the same time how thankful I was to have life insurance.””

“”Hi Lee,
Yes, use that paragraph however you want. It is so important for parents to understand that their mortgage goes on & all their other financial obligations. The money from insurance is not supposed to make you feel better or to plan a vacation, but rather sustain you through the absolute worst of heartbreaking experiences. I only know this after experiencing it personally, especially being self employed. I know parents who have lost their jobs, their homes, cars, etc. I have attended seminars to help with my healing and the one thing that all parents agree upon is that we all grieve differently, and you will go thru hell before you start to heal. It may take years to get to your "new normal" and only then do you understand what being a "survivor" truly means.

Thanks again Lee,
Cheryl “”


Please comment as an agent and also as a parent.
Just my 2 cents

Wow, I am in the IS because of an unknown peril such as this occuring, which is why we sell insurance, to protect against the unknown. I believe parents who do not purcahse life insurance for their kids really are not educated or in the group "that wont happen to me". We just don't know, and this is why I feel they should be sold life insurance.
 
I'm not familiar with a company that pays dividends and will write policies as small as $15,000. Are there any?
 
I'm not familiar with a company that pays dividends and will write policies as small as $15,000. Are there any?

NYL used to go down to $10K, not sure if they still do or not.

I think that Mass will go down to $20k or $25k for kids if I remember right
 
NYL used to go down to $10K, not sure if they still do or not.

I think that Mass will go down to $20k or $25k for kids if I remember right

Mass will go down to $25,000 on anyone, just no preferred rates, tobacco or non-tobacco only. Preferred rates start at $50,000.

Doesn't matter with kids, since they are not eligible for preferred rates anyway.
 
I'm not familiar with a company that pays dividends and will write policies as small as $15,000. Are there any?

Baltimore does a 20 pay whole life and life pay whole life with dividends starting at 15000.

It's my go to child policy now.
 
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