A. First of all, there is usually no current financial need for juveniles to apply for life insurance since they don't have any income and have any family responsibilities. However, there are a few reasons some parents do consider life insurance for their children, here are a few major ones:
- Future insurability that is guaranteed as long as the policy remains in force
- The opportunity for tax-deferred cash value accumulation over the long term
- Access to cash value once it is sufficient, through loans and withdrawals
- Providing funds for such things as college tuition, a wedding or future home
- Potential for a tax benefit through the annual gift tax exclusion
Typically the total juvenile insurance coverage with all carriers cannot exceed $1 million. The specific underwriting guidelines for juvenile life insurance could vary by life insurance carriers, but we will present two quite common guidelines in our next two blog posts.