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Children’s Whole Life. Why Every Parent Should Have a Policy for Their Children.

Updated on August 9, 2021
travishelmboldt profile image

Travis has been a husband and father for over 15 years. Served in the Army National Guard for 10 years. Currently a life insurance agent.


Why Every Parent Should Have a Policy for Their Children

A Children’s Whole Life policy is like any other Final Expense Whole Life policy, with the exception of it being specifically for children. The rate is based on age and is locked in for life. The benefit amount will never decrease, and the rate will never increase. As long as the premiums are paid, the policy will remain in effect until the client reaches age 100. The policy will begin to accrue a cash value at the beginning of the policy’s third year. The cash value can be borrowed against. And the policy can be cashed in for a special occasion such as, paying for college tuition or paying a down payment for a house.

Very Affordable and Low Rates

Since the policy’s rate is based on age, the rate will be very low, and the client can keep the policy for as long as they live, and as long as the client doesn’t reach one hundred years of age. There are only a few companies that offer children’s whole life insurance. Although, competition is very scarce, the rates are very affordable and low.

When Your Child Grows Up, They Can Decide to Keep It or Cash It Out

In my best and professional opinion, a final expense policy for your children is a solid investment into your children’s future. Once your child reaches the age of eighteen, they will have to take over the policy. This is called a change in the ownership of the policy and will teach them responsibility, by allow them to take over something very important that has been handed over to them. Once he or she starts college, they can decide to either cash out the policy to pay for college tuition or to keep the policy at its current rate. Let’s say upon graduation from college and they land a good job in their career field, and they find a house that they are going to purchase. They can decide then, either cash out the policy to pay down on the house or keep the policy at its low rate. Please take note, that it is the policy’s cash value that would be cashed out and not the death benefit.


Use the Cash-Out for the Right Reasons

A cashed-out policy will suffer a sever tax burden if not used for the purpose of either paying for college tuition or buying a house. There is a company specific form that has to be filled out that will determine whether or not the IRS will get involved. As long as, you use the cash benefits of your policy for the purpose of paying for college tuition or buying a house, you will have nothing to worry about.

Child Rider or Children's Whole Life? You Decide.

Most companies that offer final expense whole life insurance, only offer a child or grandchild rider that is attached to the client’s policy and will only cover up to a certain amount. And the coverage will last until the child reaches eighteen or when the client reaches the age of sixty-five, whichever one comes first.

Disclaimer: It is not the intention for this article to sell a particular product or to endorse a product or company.


© 2018 Travis Helmboldt


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