Whole Life Strategies - The Juvenile Life Insurance Policy

There are many financial options available today for individuals looking to assist either their own children or grandchildren. Providing support in the form of cash gifts each year (up to $12,000 per person, $22,000 per married couple in 2007) can be a very effective way to transfer wealth without suffering any tax losses while also lowering estate values. Another common choice many also consider is purchasing a permanent life insurance policy. These types of policies are typically known as child or juvenile life insurance products and primarily serve as a very effective and economical way to provide future protection to your child or grandchild’s own insurance needs during their future adult years.

            Clearly the most potent advantage to this type of financial tool lies within its overwhelming long-term, wealth building potential. A basic whole life policy issued for an infant with $100,000.00 in initial coverage can cost only $50.00 a month and provide a fully-paid up permanent life insurance product within approximately 11 years. Furthermore, some of the more comprehensive whole life products offer guaranteed insurability options, allowing that infant during their own adult life to supplement the existing coverage without further medical underwriting. This will ensure that if, god forbid, some disability or circumstance renders that child uninsurable later in life, they can still obtain more coverage.

            For example, one of my clients, at the age of 45, used his guaranteed insurability option to purchase an additional $100,000.00 of coverage even though he had recently been treated for cancer. Under regular circumstances, his current health would prevent him from receiving any kind of additional life insurance protection but because his father had wisely purchased a guaranteed insurability option with his juvenile policy, he could add the coverage and receive additional protection for his family.

            Moreover, that juvenile whole life policy can provide a steady amount of tax-deferred growth to access for future school loans or expenses incurred after leaving the comforts of college or home for the real world.

            The most common problem for young adults these days is the increasing cost of student loans from college. According to statistics compiled by the Department of Education Statistics (NCES), 65% of students who graduated from college in 2003-2004 took out an average of $19,202.00 in student loans. That figure stands to increase each year. Why let them go into debt with third party financial institutions and credit agencies when they can offset those costs with their own money from their juvenile whole life policy? This is really where the long-term benefits of the whole life policy take hold.

            By investing in your children’s and grandchildren’s future life insurance needs, you not only provide a gift of love and security toward their own future family but allow them the means to stabilize their own financial picture moving forward.

Thomas Lloyd is an insurance agent of the Guardian Disability Insurance brokerage that specializes in whole life insurance. Please feel free to contact him directly at 1-888-513-2300 ext.26 or via email at tlloyd@wholelifeinsurance.com