When I first bring up the idea of whole life insurance for children, many mothers get upset.  No parent wants to imagine outliving their child and it may seem like just another burden on the family budget for something that's very unlikely to happen.

But when I show them the benefits of locking into a low monthly premium now and what that will mean many years into their child's future, most parents are very interested.  I first got interested in these types of policies when an elderly woman came into my training office some years ago to pay a premium of about $8.  What could cost just $8, I wondered.  When I pulled up her account, I saw that her parents had purchased a small whole life policy for her many years before.  How thankful she was for this gift from her loving mom and dad!

What are the advantages of whole life insurance for a child?

1. It locks in a low premium for life.  Typically, a whole life policy costs between $15 and $22 per month - a rate that will not increase, ever.
2. The policy has cash value which can be borrowed against with a low interest rate.  Many adults carry whole life policies that have far greater cash value than the sum of the premiums.
3. There is no medical exam required.  Most policies issue quickly and with very little underwriting.  If you child develops a serious condition or illness after you have purchased the policy for them, the premium is locked in and cannot change.
4. By selecting the "paid up addition" option, the dividends from this policy will buy more life insurance in the future.  For example, my 17 year old son's policy could pay out as much as $85,000 upon death later in life, although I'm only paying for $25,000 in coverage.
5. It is a policy they can keep for their entire life - through job changes, self-employment, periods of unemployment - whatever comes their way, they will always have this policy in force.

There are also options that allow the parent to pay off the entire policy in 10, 15, or 20 years or even in one single payment.  I should also mention that State Farm's financial strength is an important reason to consider our company.  We've been around for 90 years and that's important when considering a policy for someone that may not be used until the 22^nd century.

At a minimum, a review of your policy and your needs annually is a good idea.  It's surprising to many how much life has changed each year.  It's one of the pieces of the job that I most enjoy - meeting your family and learning about your future.