No parent likes to consider the likelihood that one of their children could get critically ill, be diagnosed with a childhood disease, or even pass away. The reality is that the prevalence of many childhood diseases is rising (i.e. diabetes). The emotional and financial stress that the whole family experiences through these times is significant.
In light of these realities, what discussions should you be having with your advisor regarding insuring your children with a life or critical illness insurance policy?
Two key issues emerge that we recommend should be discussed:
The ability to guarantee your child will be ‘insurable’ throughout their life is important. It is significant since your child’s medical history, lifestyle, or career choices could make them uninsurable or subject to higher premiums as the years go by. Insurability can be ensured with a simple ‘child rider’ on most personal life insurance policies. The cost is typically around $2.50/mo.
When a child gets sick (which is far more likely than death), it affects the whole family. Significant emotional and financial stress can fill the home.
In the midst of all this, most families would want to be able to ensure the best care and treatment possible for their child if they became critically ill. To have some extra funds available to not only facilitate top-level treatment, but also cover the bills while they take time off work to care for their child, would help mitigate some of this stress.
An example of a solution we recommend for our clients to cover this need is a unique critical illness policy, offered by a top insurance company, that offers significant flexibility. In addition to a tax-free lump-sum benefit at time of diagnosis of a covered critical illness, this policy provides:
- 100% return of premium if child stays healthy
- Optional death benefit (which provides very economical life insurance)
- Premiums paid up in 20 years
Ultimately, the decision typically comes down to whether the need resonates with the client. We suggest this is an option families should be considering in discussions with their financial advisor.
If you would like more information or have questions please feel free to contact us.