Having children sure changes your life. They’re vibrant and energetic, and we love them so much. But you probably never gave a thought to giving your children life insurance. Truth is, a life insurance plan for your child could be an important way to show your love and help build them a strong foundation for the future.
What exactly is children’s life insurance?
Children’s life insurance is a plan purchased specifically for a minor. The parent or guardian typically owns the plan until the child grows up (age determined by the laws of the state).
How does children’s life insurance work?
Parents or guardians can buy life insurance policies for children, as individual plans, or as a life insurance rider on another plan. The policy can be permanent life insurance, like whole or universal, or it can be term life insurance, which has lower premium payments but only provides coverage for a set term (number of years), at which point it can be canceled or potentially converted into a different plan.
Here are four benefits of life insurance for your kids
- Insurability
One important reason to purchase life insurance for a child is to protect future insurability. It means your child is assured life insurance protection as an adult, even if serious health problems develop later on. Not all plans carry this benefit, but it’s important to make sure the plan you purchase does.
Health conditions can cause someone to have to pay higher rates or even to lose the ability to buy more insurance. Some plans also offer guaranteed options (at additional cost) to purchase additional insurance in the future without medical questions. So, it makes sense to get started early! - Affordability
The affordability of life insurance for children is another good reason to purchase it early. Often, policies cost only a few dollars per month, but premiums get higher as people age. It makes sense to lock in a lower rate for your kids that won’t increase for years. The plan you decide on today may be able to be converted into a different plan in the future, so it’s important to understand and ask questions about the features of the plan you’re considering.
For example, with term insurance you can get decades of coverage for as low as $2.50 a month depending on when you start.* And Modern Woodmen’s juvenile term plans allow you to easily convert to another children's term plan, permanent plan, or even an adult term plan in the future. It offers flexibility so you can customize your coverage to your future needs.
But how do you decide which type of plan is right for your kids? Every family situation is unique. Your Modern Woodmen representative can help analyze your needs and offer more information about individual plans. - To build cash value
While not the primary purpose, permanent life insurance plans offer an additional opportunity to accumulate cash in a tax-advantaged way, as long as the premiums are paid. Within certain limits, your child can borrow from the plan’s cash value later in life for emergencies, college or countless other reasons. The earlier your child is insured, the longer that cash value can grow. Therefore, it may be beneficial to take a long-term view.
Just remember, taking a loan from the cash value will reduce the death benefit if you don’t pay the money back. You might also need to pay taxes in certain situations. It’s best to check with a financial professional before making these decisions. - To cover expenses
There are many ways that life insurance can help cover expenses down the road. It’s not only to pay medical bills or to cover funeral expenses (which could reach thousands of dollars). It can also be used as a foundation for your child’s financial stability. Your kids could use the money held in their life insurance policy to pay for college tuition, their wedding or other expenses. It can also be used to cover costs from any loss of income while a parent grieves. Grocery and utility bills, credit cards, or other smaller debts can add up. Life insurance can help cover these costs and allow a family time to cope with the emotional stress of losing a child without worrying about finances.
Member programs
As you make the decision to purchase life insurance for your child, consider which provider is most aligned with your family’s values. Some offer benefits above and beyond the death benefit payout and cash accumulated.
Fraternal organizations like Modern Woodmen offer member programs your child could enjoy, such as youth service clubs, college scholarship competitions, member savings on purchases and even travel discounts. We also offer the Birthday Book Club to send a book each year for your child’s birthday.
Additionally, Modern Woodmen’s Newborn Life Insurance Benefit can provide coverage for a child who is born with a medical issue and might not otherwise qualify for life insurance. In case of early tragedy, the program offers financial support for the newborn’s funeral or medical costs.
The Orphan Support Benefit pays a monthly allowance for the care of a child who has lost both of their parents and helps fund college costs. Talk to a representative from Modern Woodmen to learn more about these programs.
Subject to change, fraternal programs are not part of the contract and may have specific eligibility requirements. Some programs are not available to all members.
Is child life insurance worth it?
Giving a child the gift of a life insurance policy will have a long-term impact in their lives. For only a few dollars per month, you can set them up for a brighter future. Plus, it will help give you peace of mind knowing there is money set aside to help your family stay strong, no matter what life brings. In short, the benefit far outweighs the cost.
A plan with great benefits for your kids
At Modern Woodmen, we think it’s smart to take advantage of lower life insurance premiums at a young age. We offer several options, and one unique opportunity is our MyLife Foundation® term life insurance*, designed specifically with the younger generation in mind.
With this plan, they can keep the certificate (policy) until age 30 or convert it to permanent coverage when the time is right. You get to choose the amount of insurance and how to pay for it — monthly, annually or all at once.
For a brighter future
Whatever type of insurance you choose, covering your kids with life insurance is a mindful step that makes good financial sense … for you now and for your child down the road. But at Modern Woodmen, we know every family is unique and their needs are different, and that’s why it’s a good idea to talk with a professional who can guide your decision.
Our experienced representatives have helped families of all kinds find the right solutions to help them protect their futures. The best thing you can do for your kids today is reach out and start the conversation about your family’s goals.
Start the conversation
Let's discuss your life insurance needs. Complete this form and your local representative will contact you within 72 hours.
*Certificate issued on form ICC19 MYLFT-30 or an applicable state variation. State variations may apply. Converting to a new plan is based on the products available at the time of conversion. Product availability may vary by state.