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Do children need their own life insurance contracts?

Posted October 16, 2013 in Advice Column, Ankeny

Many parents look at their children and see young, healthy boys and girls. They don’t think of outliving their children or of needing life insurance protection for their children.

The truth is, accidents do happen, and each year some children become terminally ill. When a child dies, life insurance’s death benefit can alleviate the family’s added financial burden associated with paying funeral and related medical bills.

But don’t think of life insurance for children as only a death benefit protection. A child can realize living benefits, too.

When you purchase life insurance for a child, you can protect the child’s future insurability. And remember, life insurance premiums are based partly on the insured’s age and health condition. Purchasing permanent life insurance for a young, healthy child can mean lower insurance premiums throughout the child’s life.

If you purchase life insurance that accumulates a cash value, your child can borrow against this cash value later in life to help fund a college education, put a down payment on a home or start a business.

Women and life insurance
Women need life insurance protection for the same reason men do — to provide financial protection for their loved ones.

However, women’s life insurance coverage is often inadequate or completely missing. Statistics from a 1998 study by the Life Insurance Marketing Research Association indicate that:
• Sixty-one percent of women don’t own individual life insurance protection.
• Forty-one percent of women own no life insurance coverage at all.

Women can benefit from owning life insurance. Consider these examples:
• In today’s world, it often takes two incomes to support a family. Life insurance can help replace the wife’s income if she dies.
• A stay-at-home wife assumes many important roles in the family. If she dies, her surviving spouse may have to pay someone for such services as child care, transportation for children, housekeeping, cooking and laundry. The wife’s death benefit proceeds can help the surviving spouse pay for these services.
• A growing number of women are the sole breadwinners for their families and need life insurance protection to help replace their income if they die. These women also need life insurance to help pay for any debt and medical and funeral expenses at their death. Single women may also want to consider a life insurance plan that builds a cash value as a way to help supplement their retirement income.

*A registered representative. Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America, 1701 1st Avenue, Rock Island, IL 61201, 309-558-3100. Member: NASD, SIPC.

Information provided by Modern Woodmen of America for Stoy Hall FIC, 201 S.E. Shurfine Drive, Suite 1, Ankeny, 515-289-4060,

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