Life Insurance During the Lean Years

Raising a Family

Affordable life insurance may seem like an over statement for your young adult children who are just starting out into the world. It’s hard for a 23 year old to find the wisdom behind owning life insurance when they’re dealing with car payments, rent and student loans. But because of their age, this is an optimal time for them to consider a policy.

Why not consider putting a permanent life insurance policy on your children at that age, then assigning the policy to them later in life? Financially, if you’re trying to help them get their start in the world, by doing this you’re locking in their insurability. As we age, permanent life policies get more expensive. By getting them insured at a younger affordable age, you can help them take this planning risk off the table.

When your children are first starting out, they don’t have the extra money in their budget to afford a permanent plan. But because of their age, it’s usually not that expensive to get them insured even for a nominal face amount, to take advantage of their age. If you go the permanent root such as whole life or universal life, you’re also giving them the ability to grow cash value internally within the policy. Over a long period of time, which is what they have to work with, this cash value can become significant to make a financial impact on their lives.

Think about paying $100 a month for a permanent policy that builds cash value. When the time comes and they’re on their feet financially, you would have bought them all of that time to grow cash value tax-deferred inside the contract. What an amazing wedding gift that you would be to hand over and reassign a policy to your child, who now has permanent coverage, and cash value built up inside of it.

This approach also gives them flexible options, maybe to help pay off student loans or even give them enough for a down payment on a house. The idea is, you helped them through the early years by investing in their youth. They couldn’t afford it at the time but you could. So considering a life insurance policy for your children has financial merit that later in life they will thank you for your insight!

About the author: Mark Yurkovic has been in the life insurance business for over 12 years, and holds CLTC, LUTCF, and CES designations. He enjoys building remote control boats, and playing instruments including the piano, guitar, banjo, and mandolin. Mark would love to discuss life insurance options and work towards finding the best policy fit for your family. You can contact Mark at 1-800-651-1953 or MYurkovic@Pivot.com.