Fact CheckedIf you’re looking for life insurance for newborn – the costs & benefits, this article is for you!
Hmmm, life insurance for a newborn baby sounds highly suspect. As we all know, companies are always looking for new ways to get people to spend more cash, and life insurers are no exception.
There’s something a little chilling about combining the birth celebration with life insurance…RIGHT?
Well, I can honestly say I don’t feel this way.
There are more perks to life insurance for a newborn baby than immediately come to mind, and it’s not all morbid.
So, let’s examine now whether new baby life insurance is something you should consider and why.
So What is Life Insurance, and Why Does ANYONE Need It?
The concept of life insurance is pretty simple. All of us are financially vulnerable during specific periods in our lives. This is most worrisome when we have dependents (children or otherwise), a mortgage, and debt.
…but this extends to the day we die, as funerals are costly, and bills don’t evaporate when we move on. This is where life insurance companies come in. They provide a financial safety net for some time for an agreed-to price.
There are two main types of life insurance: term life insurance and permanent life insurance.
Term is the most affordable option as a death benefit is not guaranteed, so the life insurance company passes these savings on to you.
Permanent Insurance: Coverage ’til the Day You Die
Permanent life insurance is much more expensive because you’re guaranteed to receive a payout as long as you keep up with your premiums.
This coverage comes in many different packages, but most have a cash value accumulation component that can be used throughout your lifetime.
Term life insurance works for most people most of the time. However, permanent life insurance is an excellent tool if you need coverage until the day you die and you have enough cash to make the payments.
As you can see, life insurance offers financial protection for those you love should a worst-case scenario unfold.
If You Have Debt & Dependents, You Need Life Insurance
This brings us to the question I hear a LOT! Why does ANYONE need life insurance?
Because it takes a lot of money to live, it’s as simple as that.
You know precisely what I’m talking about if you have a double-income family. If one of you loses your job, any savings accumulated is quickly spent.
This is no different than if a breadwinner dies, EXCEPT you lose that paycheck PERMANENTLY!
Life insurance provides a safety net for your family so that if something terrible happens, they can continue to live the life they’ve become accustomed to.
This is all good, BUT what does this have to do with babies?
Life Insurance for Newborn: Cost & Benefits
If you are looking for life insurance for newborn babies – chances are you just had a child.
… or maybe you are planning for anything that could happen when that time comes.
Unfortunately, life happens, and people die. No one wants to think about it – especially regarding young people. But illness can hit, and funerals and time off of work cost a lot.
Thankfully, this is uncommon, but you’re financially prepared if something occurs if you’re child is insured.
Funerals are Very Expensive
The cost of a funeral is staggering, and for most, it’s a serious financial setback.
Who has an extra $10K sitting around – especially during an extraordinarily stressful period?
The rationale behind purchasing final expense insurance for an adult is the same as for a child. It covers the funeral cost and keeps the family from being thrown into a financial tailspin when they least need it.
Here are some other thoughts…
A life insurance policy for a newborn baby is incredibly affordable so you can rest easily for very little money.
There are also several other very solid reasons to buy life insurance for your newborn:
Life Insurance for a New Born Baby: Guarantee of Insurability & Affordability
Life insurance isn’t a given. You have to qualify for a policy; the older you get, the riskier it is to get insured. I always encourage people to buy life insurance when they are young and healthy.
Newborn babies aren’t declined unless something is wrong…and the premiums are affordable.
Do you know how many people I speak to who don’t qualify for traditionally underwritten policies later in life? Too many.
That’s because they wait until they are unwell and THEN call me. You’d be shocked how many people do this.
I hate telling clients that they’re out of luck. The sad part is no one wants to think about life insurance when the going is good.
Purchasing coverage for your baby locks them in at very affordable rates and protects them no matter what the future holds—especially if you have a Guaranteed Insurability Rider!
What’s a Guaranteed Insurability Rider?
A guaranteed insurability rider enables your child to purchase more insurance without further evidence of insurability.
This is a terrific option for your kid to have if they are diagnosed with a medical or psychological condition at some point that boots them into a high-risk category. This means they can still buy life insurance at a reasonable rate.
The best part? This rider only costs a few dollars more per month. Planning helps your child protect his or her loved ones in the future…
It’s one of my favorite reasons to buy life insurance for a newborn baby.
“I bought my daughter a $250,000 whole life policy a month after she was born. It has a guaranteed insurability option on it which says that between the ages of 25 and 45 she can qualify for more life insurance without any medical underwriting.”
“None of know how healthy we’ll be later in life, but we can assume we won’t be as healthy in our 40s as we are in our teens. If you wind up with weight issues, diabetes, a melanoma or anything else, you can still qualify for greater life insurance without health being a factor.”
Life Insurance for Newborn: What is the Best Type of Policy?
Okay, you know that life insurance for a new baby fits your needs. So, what’s the best life insurance policy for a child?
Permanent coverage is a terrific fit. It offers a guaranteed payout and a cash value accumulation feature that benefits your child in the long run.
…but what if you can’t afford it?
Well, thankfully, term insurance has come to the rescue.
With Ivari, you can lock in $250k of 30-year term coverage for your child at $25.20 monthly. The best part? This option also guarantees insurability, as it can be converted into a permanent policy at any time with no additional underwriting.
It’s a win-win – some of the benefits include:
- your child is entitled to non-smoker rates no matter what happens in the future
- if your child takes up a hazardous sport in their early 20s, no need to worry
- you can add a critical illness protection rider for up to $75,000 at a very reasonable cost…we’ll save the critical illness for children discussion for another post
Another option is a Universal life policy. This is permanent coverage but far more affordable because it usually doesn’t accumulate the same cash value.
Check out my latest article about Universal Life Insurance if you want more information about this type of policy.
Newborn Life Insurance Cost & Benefits
After being on this planet for over 50 years, I can honestly say that planning is the key to success. This comes from many years of not doing a stellar job in this aspect of my life.
Like many people, I have some regrets.
The good news is I learn from my mistakes.
Family planning saves your loved ones tens of thousands of dollars, and life insurance for newborns is no exception. Why not buy your children life insurance if you can afford it?
If set up correctly, it gives your kids access to affordable future insurance and a nest egg, and it can help your family in case something tragic unfolds.
All of this is great, and it’s super affordable.
Newborn Life Insurance Cost & Benefits
Call Policy Architects TODAY
So, if you’re seriously considering newborn life insurance costs and benefits, we can help!
We assist families throughout Canada with their life insurance needs. It’s a great job.
Because we’re a boutique agency, we prioritize each client as an individual. After all, you’re a client for life.
Call Policy Architects today to find the best fit for your unique needs. This is how we set ourselves apart from the pack.
