Life Insurance Options for Grandchildren
If you’re thinking about buying life insurance for your grandchildren, you’ve come to the right place.
You’ll be hard pressed to find another gift that will stand the test of time, and help your grandchildren secure their financial future like a whole life insurance policy.
There are many life insurance options for grandchildren that will allow you to leave a lasting legacy long after you’re gone.
The potential benefits of taking out a life insurance policy for your grandchildren are many. In this article we’ll talk about the top 5:
- Accumulating Cash Value
- Bypass Uncle Sam
- Low Premiums
- Maximum ROI on your Savings
- Coverage that Lasts a Lifetime
Accumulating Cash Value
With whole life insurance policies (also known as permanent policies), the cash value accumulates with each year. And because of the cash value of these policies, you can borrow money from your policy at any time.
This can allow your grandchildren to take out money for a down-payment on a house or pay for college tuition.
Imagine how good it would feel to provide your grandchildren with such profound financial security.
Bypass Uncle Sam
Here’s a secret you may not be aware of….no one likes paying taxes! Unfortunately, paying taxes is an unavoidable necessity.
Here’s where the good news comes in: cash values for whole life insurance policies are tax deferred. That’s right, the payout for a death benefit will NOT be subject to tax.
In many cases, even if money is borrowed against the life insurance policy for something like a down-payment for a house, taxes are usually deferred.
Of course, some restrictions may apply in certain situations; that’s why it’s important to consult with an experienced life insurance agent to get all of your questions answered.
Low Premiums
An expensive premium is one of the main reasons why some people are hesitant to purchase life insurance. Applicants may feel this is an unnecessary expense or one they can’t afford.
One benefit of permanent life insurance is the ability to lock in a low premium for life. Regardless of how much time passes, you won’t have to worry about your rates increasing.
The younger in age at the time of policy underwriting, the lower the premiums.
Sample life insurance rates for grandchildren
Benefit Amount Monthly Premium
| $10,000 | $5.00 |
| $15,000 | $7.50 |
| $20,000 | $10.00 |
Rates are subject to change based on age and state of residence.
Maximum ROI on Your Savings
This is not something you seem to hear talked about much, but can pay huge dividends to those who are more financially savvy.
If you purchase a whole life policy at a younger age, you’ll be paying a lower premium. This means the cash value will grow at a much quicker rate.
Policies like this that are geared towards maximizing cash value can generate an average rate of return of about 5%.
To put this in perspective, you’re looking at a rate of return 400-500% better than most CD rates offered by banks.
Coverage that Lasts a Lifetime
These permanent life insurance policies last forever, so long as you continue to pay the premiums.
This will give you extra peace of mind to know that your grandchildren will always be cared for and have your policy to fall back on.
If your child or grandchild develops a disability or chronic illness later in life, they’ll pay much higher premiums and it could be difficult for them to obtain coverage at all.
Buying permanent life insurance at a young age will guarantee future insurability.
In our opinion, guaranteed future insurability is far and away the most important reason to consider a permanent policy on your grandchild.
Once the child reaches adult age, they will have the option to add additional coverage amounts without having a medical exam or the risk of substantial rate increases.
Limitations of Life Insurance Options for Grandchildren
Although whole life insurance policies come with plenty of benefits, there are some limitations that you’ll want to be aware of.
The primary limitation you’ll find with life insurance policies for your grandchildren is how much coverage you can get.
For example, AARP New York Life offers a Young Start Life Insurance policy that offers a maximum of $20,000 coverage.
But in addition to the benefits we already discussed, other benefits of this policy, in particular, is that no medical exam is required and the low premiums range from only $5 to $10 per month.
Make Sure to Explore Your Options
If you’ve started shopping around already, then you are well aware of the many life insurance options that are available. With all of these options, the process of buying life insurance can be downright intimidating.
At Simple Life Insure, we remove this intimidation and make this experience easy and stress-free.
A Lasting Legacy for Your Grandchildren that You can be Proud of
You’ve already given so much to your grandchildren and have impacted their lives in more ways than you can know.
Long after you’re gone, the memories and legacy you’ve created will live on forever.
What better way to add to that legacy than giving the gift of financial security to your grandchildren through a whole life policy?
With all of the life insurance options for grandchildren to choose from, you’ll be able to maximize your return on investment far more than a CD or savings bond from a bank.
If you have questions at any point, don’t hesitate to reach out to an experienced independent life insurance agent to provide the answers you need. They’ll remove all the guesswork and make sure you get the policy and coverage you want.
If you have any questions on life insurance for grandchildren or anything else, please don’t hesitate to reach out to us.
We are here to help and will never pressure you in any way.
