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Providing For Dependents
Using life insurance to protect your child’s future is an obvious and practical choice when doing your financial planning. Is that what you hear from almost every life insurance agent?
Healthy Adult:
We all hope that our child grows up to be perfectly healthy but if he acquires some health issues later in his life, then getting a life insurance policy for him will be difficult and expensive. A whole life insurance policy can provide coverage for their entire life.
High-Risk Hobbies:
Every child dreams to be something. We should help them achieve their goals and help them in becoming what they want. If your child is looking up to pursue a high-risk hobby or occupation such as a firefighter, police officer, or astronaut then his option of obtaining a life insurance policy could be limited. However, if he already has that whole life insurance policy purchased by you, then his life would be much easier.
There are many other factors and reasons to obtain a life insurance policy of your children. You can read a detailed post on Do Children Need Life Insurance.
If you have suddenly become the primary support of your dependents you may want to consider buying a life insurance policy or increasing an existing one to help protect their future economic stability. You may also want to consider having your divorce settlement (often required) include additional life insurance coverage for your former spouse to bolster child support or alimony for the future. There are four basic options when it comes to making your child a beneficiary on your life insurance policy.
Designate your Child as the Beneficiary of Your Existing Policy
The easiest way to ensure your child is protected after you have passed on is to name them as your beneficiary on your existing life insurance policy. Upon your death, your child will be paid the proceeds or “death benefit” directly. If the child is not old enough to receive the funds, a custodial account can be set up to receive the funds on the child’s behalf.
For more information on how to handle your life insurance during a divorce, please visit our other sections.
If you are concerned about what will happen to your life insurance policy when you go through a divorce and need more information please consult your attorney or financial advisor. If you decide you need additional coverage, our licensed agents will be happy to help you obtain FREE Quote. Please send us an email or call us at (800) 521-7873.
