April 18, 2012 (Powerhomebiz.com) New Amsterdam Life, an independent insurance agency in New York City, is leading a resurgence of interest in child life insurance by parents and grandparents seeking alternative ways to save for college and beyond while securing permanent life insurance for their children or grandchildren.
Financial planners and insurance professionals are seeing a renewed interest in policies insuring the lives of children – from newborns to teenagers. The recent volatility in the stock market and the under performance of 529 plans has led many parents and grandparents to consider other financial products, like life insurance.
Child life insurance (sometimes referred to as juvenile life insurance) has historically been used by families to cover the unexpected costs of funeral and burial expenses following the tragic loss of a child. For decades insurance agents would rarely discuss child life insurance with their clients, the topic was too morbid or distasteful or the need for adult insurance superseded any possible discussion of insurance for a child.
Today’s child life insurance policies are structured for maximum cash value appreciation. Mortality is highly unlikely during the formative years of the policy, so at the time the insured has an insurance need of his or her own the cash value within the policy has had at least thirty to forty years to grow tax-deferred.
Child life insurance is an old idea with features that are very attractive for most families with small children,” says James Garfinkel, CEO of New Amsterdam Life (http://newamsterdamlife.com) and Executive Director of the not for profit Juvenile Life Insurance Foundation, “it offers tax advantaged growth that can help pay for college, a wedding or new home and, properly structured, can provide fully-paid insurance for life.”
Parents and grandparents also like the fact that there is no invasive medical exam required and once approved the insurance is guaranteed for life, regardless of future health or insurability.
It is important to speak to an experienced life insurance agent who specializes in these types of policies. The products offered by the leading carriers differ greatly and what might be the right product for adult insurance will not be the best vehicle for a child who has a life expectancy eighty or more years into the future.