Reader’s Question:

My wife and I just had our first baby boy. A few friends recommended taking out a juvenile insurance for him. I have never heard of this before and would like to know if it is necessary and feasible. I have also heard it is among the cheapest life insurance in the market. Is this true?

Michael

Bellevue, WA

First of all, congratulations to both of you!

Life insurance is now available for newborn infants. Better known as juvenile insurance, it is a life insurance policy for a young adult under the age of 16. Some policies carry some cash value while all pay out a death benefit. There are pros and cons to taking out such a policy for your child but the risks and costs of not doing so should be considered. Generally, the benefits include the assurance that the infant’s future insurability is guaranteed no matter what health conditions he or she may develop. Another advantage to having your child insured is that your child qualifies for lower premiums, and yes, which could be one of the cheapest life insurance in the market.

In case the unthinkable happens and your child dies of an illness, the pre-existing juvenile life insurance can provide you and your family with the extra cash needed to settle the medical bills as well as the funeral and burial costs. Juvenile insurance can be of any type, for example: whole life, limited pay life, universal life, convertible term, graded premium whole life, or modified whole life. In most cases, due to the cash value accrued, a juvenile insurance policy can be used to build cash or loan values to help pay for a college education.

It might seem morbid when thought of but we all want the best for our children. The premiums are low and the pay-offs high. If you can afford it, you may as well go for it!