Life Insurance for Children policy was famous in the 19th century and that was only to pay for the funeral expenses. In the start this policy was contentious but with the passage of time it got popularity. Child insurance is for the poorer group of people unlike other conventional life insurances. Insurance for children is almost same as the whole life insurance but with lower face value, very few rider and add-on option and no medical exam.
What is Juvenile Life Insurance?
Juvenile Life Insurance is also a type of Permanent Life Insurance. It is also used to insure the life of a child and it is a monetary planning instrument. It must not be confused with child life insurance which is for covering the sudden and unexpected expenses for the funeral or burial with lower face values.
Basically there are two type of Juvenile Life Insurance:
1. Whole Juvenile Life Insurance
2. Indexed Juvenile Life Insurance
Whole Juvenile Life Insurance
Whole Juvenile Insurance is a type of permanent life insurance. It has minimum guaranteed rate of interest and a no guaranteed share declared per year by the insurance company in the contract.
Indexed Juvenile Life Insurance
Indexed Juvenile Life Insurance is also a type of permanent life insurance in which the cash value increases depending on the performance of equity up to a definite percentage.
As a Monetary Planning Instrument
Recently this insurance policy has become very popular as savings for college and lifetime, estate planning and investment. Most of the insurance companies offer Juvenile Life Insurance as an add-on to the normal insurance for the parents. With very few limitations, grand parents can also buy insurance for a grandchild. Its popularity is increasing rapidly day by day within the insurance professionals because of the following benefits.
1. It creates opportunities of lifetime savings by the growth of cash value inside a policy. These opportunities can be used as investment in some business, security or to pay college dues.
2. The annual required premium in Juvenile Life Insurance is normally 700 dollars. It provides the face value of nearly 100,000 dollars. They also facilitate to use the gift tax exclusion to pay premiums and avoid tax charge.
3. Policy with guaranteed rate of interest is offered by most of the insurance companies. they also offer a non-guaranteed bonus. some companies pay annual bonus consistently for more than 100 years.
4. It is not required by the insurance company to tell the insured child about the Juvenile Life Insurance. In addition to this, parents can decide when to tell the insured child or when to give child access to the insurance money.
5. If parent wants to protect an asset to benefit their child, Juvenile Insurance is the best insurance. This insurance policy is protected by law against creditors.
6. Juvenile Life Insurance is a No Exam Life Insurance. But if the policy is large then they might have to confirm age, sex and other health issues of the child.
Well, the critics think that it this is an unnecessary life insurance because low expectations of the child death. They think that investing the insurance premiums in bonds, stock exchange etc. can give more benefit than this.