April 17, 2014 – By Dave Serena, Insurance Agent Wisconsin Medical Society Insurance and Financial Services, Inc.
One of the best times to purchase Whole Life Insurance is during the first year of a child’s life. Why? Because in this age of market volatility and uncertainty, Whole Life Insurance not only provides life insurance, it also can serve as a safe, tax-sheltered financial tool that will grow with a child. Given enough time, the dividends paid can increase exponentially. Although dividends within contracts are not guaranteed, quality mutual insurers have a track record of safety and security built into their promises.
Here is what $100 per month does for a newborn: based on current dividends, one can expect to have around $1 million in life insurance and in cash value inside the contract by the insured’s life expectancy and have some unusual safeguards along the way.
Unlike other long-term savings vehicles, there are options for protecting against disabilities for both the parents (who initially are paying the premium) and for the grown child in the future. This means that the Whole Life policy will self-fund if the payer becomes disabled, so the dollars will accumulate, no matter what. No other financial tool can make that kind of promise.
There are also opportunities to increase the principal, regardless of the insured’s health, later in life. If the Whole Life Insurance is purchased while the insured is very young, there are options to purchase additional coverage at certain ages or when certain “life events” occur, such as a marriage, a baby or a new home.
If grandparents are in a position to give a gift that will last throughout their grandchild’s life, contracts can be structured to be paid up in shorter time frames—as little as 10 years.
Thanks to the options and riders, Whole Life Insurance is getting a new look and a new review as a tool for a child’s financial well-being as she/he grows and matures. It just may be the best financial gift to give a child or grandchild.
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