Whole Life Insurance for Your Grandchildren
One of life’s greatest gifts is grandchildren. When they come into our lives, we want to protect them and set them up for success for the future. One way of doing that is gifting them a whole life insurance policy.
It may be a little different from what they would expect, but buying Whole Life Insurance for your grandchild is a thoughtful way to show just how much they really mean to you.
How does Whole Life Insurance work?
To give the gift of life insurance for your grandchild, it will always be a Whole Life Insurance policy. Whole Life Insurance is a permanent type of coverage with a savings account named “cash value.” The base value continually grows as the years go by.
Whole Life Insurance is easy to understand. Here is how it works:
- Your grandchild will have guaranteed lifetime coverage that will not expire at any age.
- The premium rates will never increase.
- The coverage you buy is guaranteed never to decrease in value.
- Your grandchild will be insurable in adulthood even if they choose a dangerous career path or hobby.
- Cash value continually builds over time so that you can withdraw for personal use (to pay for a house, college, or other life events).
Whole life insurance is one of the few types of life insurance available for minors and it lasts as long as the premiums are paid.
Why is Whole Life Insurance a perfect gift?
In general, life insurance serves as an income replacement for dependents after you are gone. And, it can be a useful estate or retirement planning tool while you are alive.
But if your grandchild develops a serious or lifelong medical condition, they may not be able to qualify for insurance when they are older. The same applies if they grow interested in a high-risk career or dangerous hobby.
Buying Whole Life Insurance while your grandchildren are younger and healthier can secure coverage for their entire life.
Nevertheless, be aware that Whole Life Insurance is a long-time commitment. The higher cost might be worthwhile if you can comfortably afford the premiums for a couple of decades.
Minor children cannot legally consent to a policy. So if you are not their legal guardian, you will need the child’s parent or legal guardian to consent and sign off on the policy. It is also important to remember that you (or the child’s parent) must have your own personal life insurance policy before buying a Whole Life Insurance policy for a minor.
6 Reasons for you to gift Whole Life Insurance to your grandchild
1. You can transfer the ownership of the policy when they grow up
You can transfer the ownership of the policy to your grandchild when they reach majority age. This process is simple, but it depends on your specific insurer. When the transfer is done, the new owner would have to pay the premiums, instead of you.
2. Life Insurance that lasts a lifetime
Whole Life Insurance creates a living legacy that will accumulate cash value with the years. It supplies death benefit protection and helps your grandchild get a head start on their financial future.
3. It will not wear out or fall apart
A life insurance policy bought for your grandkids today can still be there and increasing in value years from now. That is something that conventional gifts do not offer. That cash value can be borrowed against things such as to pay for college or a down payment on a house, to fund a business opportunity, or to supply a comfortable retirement.
4. Tax advantages
By the law, the cash value that accumulates in the policy is tax deferred. Even when cash values are borrowed, there is no tax in most instances. The money received by beneficiaries is also not taxable as income. Speak with your Florida Health Agency expert for more details.
5. Lower premium rates for insuring a child.
In most insurance policies, premiums increase with the years. But with whole life insurance, you can lock in the premium costs at the child’s current age for life.
6. It can help guarantee future insurability.
Once the policy has been issued, the coverage cannot be canceled if all required premiums are paid. Also, getting whole life insurance for your kids can prevent them from not being insurable for any potential health issues, COVID-related or others, that they may develop later in their life.
Whole Life Insurance application process
In most cases, you can fully apply 100% online or by phone. You will not need to worry about a physical exam because exams are never needed for children.
After talking to your Florida Health Agency expert and choosing the best policy for your grandchildren, you will need some documented information to apply. After you send all the information and sign the papers, the application process begins and within a few days, your Florida Health Agency will let you know if the kids are approved and mail you the policy.
Keep in mind that shopping with Florida Health Agency is completely FREE in all cases. Not a dollar will be charged from you or add up to your premiums if you choose to buy a plan that one of our experts found for you. We want to help you make a well-informed decision on what’s best for you and your grandchildren’s future.
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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all your options.
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