Can grandparents buy life insurance for grandchildren? Most of the time, grandparents take it upon themselves to purchase life insurance for their grandchildren. This will act as a safety net for future expenses like educational costs of their grandchild or in case their grandchild passes away. So, if they are searching for various forms of financial protection for their loved ones, exploring the landscape of life insurance is not a bad idea.
Whether you are always looking out for them or have become so emotionally attached, considering getting a life insurance policy for them is a good plan. Besides, as your grandchild or grandchildren grow older, life insurance becomes an important asset to them. Hence, if you are interested in investing positively in the life of your grandkids, getting life insurance is a great way to start. For more details, keep reading this article.
How Does Coverage for a Minor Work?
The way life insurance works for an adult is the same way it works for a minor and even your grandkids. The only difference between them is that the children do not make the purchase themselves. In other words, a third party buys the life insurance quote. Most of the time, whole life policies are purchased for children while term life is a lesser-purchased option.
Either way, if the child passes while the insurance quote is still active, the insurance provider will pay the tax-free death benefit to the beneficiary or beneficiaries of the policy. This payout money can be used for any goal.
When purchasing a term life insurance quote, it typically lasts until the child turns 25 years old, at this point, the coverage will be closed. Meanwhile, if you choose to purchase a whole life policy for your grandchild, the coverage will not decrease and premiums will never increase. Additionally, coverage will last throughout their lifetime.
Can Grandparents Buy Life Insurance for Grandchildren?
Yes, grandparents can choose to buy or purchase a life insurance policy for their grandchildren. First of all, it is a great way to support them, assist them if something unexpected happens, or help with their college costs even after they pass away.
Moreover, grandparents can purchase life insurance for their grandkids with or without the permission of the child’s guardian or parent. The coverage amount accessible for child life insurance quotes depends on the face value of the parent’s quote.
In addition to this, health records or medical exams are not required. You only need to answer two to three health-related questions about the kids.
Types of Life Insurance for Grandchildren
No doubt that there are different types of life insurance and various quotes to select from. Meanwhile, if you are searching for a good policy for your grandchildren, here are some of the common types that you might want to start with:
- Term Life Insurance
This form of insurance provides coverage for a particular term or period. This could be 10, 20, or 30 years. If the grandchild or grandchildren you insure outlast this term, the quote will expire without any value remaining. This is like renting a safety net for a specific period. Moreover, if you do not make sure of the death benefit, it will go away at the end of the term of the policy. Nevertheless, term life insurance is more affordable, unlike whole life insurance.
- Whole Life Insurance
Compared to term life insurance, whole life insurance offers coverage throughout the lifetime of the insured. Just as long as you keep making premium payments, the policy will still be in effect and active. Apart from this, this type of insurance comes with a cash value component. This cash value is a part of your premium that accumulates over time. The cash value can also be accessed later in the future.
Benefits of Buying Life Insurance for Grandchildren
Here are some of the benefits or advantages of purchasing or getting a life insurance policy for your grandchild as a grandparent:
- Investment tool.
- Financial security.
- Guaranteed insurability.
- Peace of mind.
- Future purposes.
- Lifetime coverage.
How Much Does Life Insurance Cost for A Grandchild?
The average cost of life insurance for a grandchild is $10 to $17 per month and $25,000 in coverage. Meanwhile, the gender and age of the child affect the cost of purchasing this type of insurance. The insurance company you choose also plays an important role in the cost determination as well.
How To Buy Life Insurance for Grandchildren
With the guide you will find below, purchasing a life insurance policy for your grandchildren will be a piece of cake:
- Get familiar with the various types of life insurance quotes.
- Understand the benefits, features, drawbacks, limits, and exclusions.
- Compare insurance companies and quotes.
- Check out their coverage levels, premium costs, and reputation of the insurance company.
- Begin the application process.
- Provide details of the medical history and health of the grandchild.
- Be honest and transparent.
- Get the policy proposal if the application is approved.
- Review carefully.
For any questions, reach out to a financial advisor or insurance professional for advice based on your goals and circumstances.
