Life Insurance for Children
Life Insurance for Children: Playing on parental emotions is the name of the game for many insurance companies. Buying a life insurance policy for children is the topic of many controversies. On the one hand, if a child has a long family history of illnesses buying insurance when they are young, before they get ill, is probably something that parents may want to look into. Some long term health issues can make a person ineligible for insurance when it is really necessary. Another potential benefit is that some policies offer the option to borrow against the policy when the child opts to continue their education to help defray education costs. On the other hand, the general consensus is that buying life insurance policies for children is not really necessary. Sometimes, an unforeseen accident occurs and the life of a child is lost, however the majority of the parental policy holders are lucky and their children outlive them. This results in a policy that is paid on for many, many years that never has to be put to the test. More practical investment ideas would include Roth IRA’s or a 529 plan. • A Roth IRA is a plan that you can make contributions to with your post-tax income. The principal balance continues to grow without being taxed (remember you are paying into the plan with money that has already been taxed) and if you need to withdraw the money for whatever reason, it is not taxed nor do you need to report it on your income tax return. • A 529 plan is an education savings plan. The 529 plan was created in 1998 and named for the Internal Revenue Code Section 529. Let’s face it, education costs are not going down. Every state in the U.S has at least one such plan and it does not matter where the plan originates from, it can be used in any other state. As long as a few simple requirements are met you can receive a few tax benefits such as when withdrawn by an educational institute to pay for a student’s tuition, the withdrawal is tax free. Also, with this type of plan, the parent or contributor remains in control of how the money is to be used. There is no coming of age clause where the student automatically gets control over the account. One analogy that was found when researching data for this article made a lot of sense, “The well-known analogy of a term policy as "renting" and a permanent policy as "owning" life insurance is a good way to illustrate their true values. When you rent a house, you receive all the benefits of living in that house. However, when your lease is up, you have built up no equity. Even if you've paid rent for thirty or forty years, when you move out you leave with as much value as you started with — zero.” Why pay for something that you are not going to get any return out of? The conclusion is that one must research which program is best for their situation. The important thing is to be informed and not pressured into making an emotional purchase. The eLifePolicy.com website offers one of the quickest and most convenient ways to purchase term life insurance coverage. Their easy 3-step process can be completed from the privacy of your home or office without speaking to an agent or requiring you take a medical exam. Just answer a few health questions. If qualified, you can print your in-force life insurance policy in minutes!Click Here
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