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While child life insurance is often written off as a huge waste of financial resources for a family, with no chance of any kind of return on their investment, there are definitely some options that have been crafted as smart buys for parents.
Most of these options do provide return investment opportunities, at highly affordable rates, while providing a current, and future, safety net for children who may have illnesses or disabilities that might hinder their insurability later in life.
One-Time Premium Coverage
This option is only offered by select insurers, and provides parents the option of paying a one-time premium that will cover a child for up to 23 years.
One such plan, offered by Illinois Mutual, provides a safety net for parents with an ill, or disabled child, for only $300—which works out to only $13 annually. This plan is Mutual’s ChildGUARD policy and the death benefits it includes rise with age:
- Ages 1 to 13; $5,000 in benefits
- Ages 13 to 18; $10,000 in benefits
- Ages 18 to 23; $15,000 in benefits
Furthermore, once this policy has run its course and the child turns 23-years-old, it can then be transferred to a whole policy for up to $100,000 regardless of the child’s previous medical history and insurability.
Group-benefit plans are sometimes extended to employees as part of their insurance coverage and will extend past the employee to their spouse and children. These benefits do include death benefits and generally provide coverage for around $5,000 to $25,000 worth of funeral expenses.
Just like most insurance coverage extended to children through an employee’s package, they do expire once the child reaches a certain age. However, there are some plans that will allow a child to spin off their own insurance policy regardless of their lack of insurability anywhere else.
Gerber Life College Plan: Endowment Insurance
This insurance product is an excellent investment for parents who want to insure their child early and set them up for a “face amount” payout once they reach a certain age. These “face amounts” can be for any amount between $10,000 to $150,000; depending upon how much parents want to invest over the course of 18 years.
For example, parents who wish to purchase a $10,000 policy can expect the following:
- 18-Year Payment Plan (starting from age 7)
- Monthly Premiums of $33.33
- $7,200 Total Paid from Premiums
- Child Receives $10,000 at age 25
- Total Return Investment of $2,800
While these are affordable rates for any parent, the popularity of this policy plans comes from its added benefits – click here for more information. For one, the “Face Amount” payout of any policy, regardless if its amount, has a guaranteed payout to the child, even if the parent dies and can no longer pay the premiums. Second, the payout can be used for any expense that the child wishes to use it for.