How to buy life insurance for grandchildren
As a grandparent, your grandchildren probably hold a special spot in your heart. Whether it’s sneaking them a piece of candy before dinner, or teaching them a great life skill, you’re always looking out for them. One thing you may not have considered is purchasing a life insurance policy in their name.
A life insurance policy, particularly for younger people, could become a great asset to them as your grandchildren grow older. In this article, we’ll help explain the benefits of buying life insurance for grandchildren, and steps you could take to get the right policy.
What coverage may be best for grandchildren
The plans and benefits of life insurance may vary depending on the age of the policyholder. If you’re buying a policy later in life, a term life insurance policy is frequently preferred because it offers coverage based on a fixed amount of time. Once that time period ends, so does the coverage.
However, for a young person – like a grandchild – a whole life insurance policy could be a better option. With whole life insurance, the policy is designed for coverage throughout the policyholder’s lifetime. Not only could the coverage last for decades (as long as the premium is paid), but there could be several additional benefits to considering a whole life policy for your grandchildren.
How life insurance could benefit grandchildren long-term
With a whole life insurance policy, the younger the policyholder, the more beneficial it becomes in the long run. Young people typically cost less to insure, which means a lower premium price for the policy. With a whole life policy, the rates stay the same for the life of the policy. This means that, even as an adult, your grandchildren could be paying the same low premium as when the policy began for them as a child.
Another benefit of early coverage relates to future health issues. As long as the premium is paid and your grandchild has coverage in place, that coverage could continue even if they develop a serious health issue later in life.
In addition to fixed rates for the policy payments, and coverage despite future health issues, there is one more way that your grandchildren could benefit from a life insurance policy.
With a whole life insurance policy, your grandchildren may have the option to borrow against the potential cash value for expenses like student loans, a wedding and more.
How to buy life insurance for grandchildren
Buying a life insurance policy for your grandchildren is simple. Once you have the permission of their parents/guardians – or your grandchildren themselves if they are 18 or older – you can start the quote process with a company that offers policies for children under 18. If you're considering a life insurance policy for your grandchildren, you could start a legacy that may last them their entire lives.
