Wednesday , November 29 2023
life insurance for your children

Life Insurance for Your Children, When to Buy?

InsuranceLecturer — This may look odd but, if you have enough disposable income, it can be a very good way of planning for the future. Taking the more uncommon possibility first.

Some children are discovered as talent early in life and begin to earn on a regular basis. This can be as models for advertising, or in movies or the music industry. If their capacity to earn becomes an important part of your family budget, you should insure their lives.

However, not everyone is lucky and the more usual decision is on whether to use disposable income to start them on the life insurance road early. With life expectancy rising in line with modern medicine’s successes, the premiums for a permanent policy can be very low for high projected benefits.

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The other advantage is that there are unlikely to be any major health issues to affect the issue of the policy. With a permanent policy in place early, this will avoid any later complications should there be a diagnosis of heart disease or any other medical problem likely to shorten life.
For your own life

There is no right or wrong time to consider buying life insurance so long as you understand the costs and benefits. Why buy young? The first advantage is that, with many years of life ahead of you, the premiums for all types of policy will tend to be low.

You and the insurer will both justly expect a long life and so spread the premiums out. If you delay, there is a risk you may be diagnosed with a life-shortening disease. This may justify the insurers in rejecting you altogether or charging you a very high premium.

Equally, the older you are when you ask for cover, the higher the premium even though you are fit and well. The premium rates spread out the risk over the expected years of life.

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The disadvantage of insuring yourself while young is that your disposable income is often under pressure from the high costs in setting up a home and starting a family. Adding what is often quite a high premium for a permanent policy into this mix can be a real strain.

You should think very carefully about this because, if you should default, you may lose the policy. The right solution may be to start with a convertible term policy and, when your finances have stabilized, you can convert to a permanent policy.

In all this, you should consider taking independent financial advice before committing yourself. There are many options to consider in the type of policy and the amount of benefits to guarantee. There may also be tax implications.

Taking advice from someone working on a sales commission is not going to give you objective advice. Paying an independent advisor is good value so long as your income or asset holding justifies it. Once you have the advice, you can buy through this site and save money on the premiums.

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