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There are several factors
that go into the mix that set the life insurance price or
rate. One of the biggest factors affecting the price of the
life insurance contract is the age of the proposed insured.
If all else is equal the age of the proposed insured kicks
in favor of the youngest applicant. If everything else is
equal, meaning that all of the applicants are relatively
healthy, the youngest applicant will have the cheapest
policy.
How much insurance should
you buy for your child or infant? You should buy the largest
amount of insurance that you could easily afford! What type
of insurance should you buy? You should buy permanent
insurance. Permanent insurance builds cash value that you
could use to help defray college costs when your childd goes
to college.
Permanent insurance unlike
term insurance will pay a death benefit at some point. Term
insurance normally expires before a death benefit is paid.
Term insurance is statistically calculated to not be in
effect when you die. In another article I will discuss term
insurance vs. permanent insurance. For the interest of this
subject matter it is safe to say that you should get your
kids a lot of life insurance while they are young and
healthy. The younger they are the cheaper the life
insurance. If the premiums are paid and the policy does not
lapse permanent insurance will always pay a death benefit.
Half the adults that I
talk to have only one policy, life wise. It always turns
out to be the policy that their mother took out on them.
I’ll ask a 40-year old, “do you have any life insurance”,
they normally reply, yea I have the policy that my Momma
took out on me”. Sounds crazy but true, that is all they've
got! Half the time they are in poor health and are not
eligible to get anymore life insurance, so whatever Mom took
out on them is it!
It is also important to
select a good insurance company. In most cases we are
talking about 80 or 90 years after the policy is written
that a death benefit is paid. That is because people live
way into their 80’s, 90’s and 100’s now and in the future.
Don’t just buy a little
$50,000 or $100,000 policy. Ninety years from now $100,000
won’t buy very much. Get a quarter of a million policy. You
will be surprised how inexpensive they are on youngsters.
The price stays the same no matter how old they get. The
policy stays in force no matter how poor their health gets,
as long as you keep paying.
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