I’m looking for a good juvenile life insurance policy for my kid. Does anyone know of any companies that offer great options with cash value build up and accumulation of death benefit? I want to make sure my child is protected and has a secure financial future. Thanks for any advice!
Northwestern Mutual has a great policy that accumulates cash and can be used as a college funding or 529 plan. My friend’s son has it and it’s working out well for them.
Lior said:
Northwestern Mutual has a great policy that accumulates cash and can be used as a college funding or 529 plan. My friend’s son has it and it’s working out well for them.
That sounds great, thanks for letting me know!
Why would you want to accumulate cash in a life insurance policy? Wouldn’t it make more sense to buy term life and invest the difference?
Gale said:
Why would you want to accumulate cash in a life insurance policy? Wouldn’t it make more sense to buy term life and invest the difference?
A policy my company offers is similar to a Roth IRA, but with higher interest rates and tax-free growth. It’s a great way to save for retirement and build wealth. Plus, it’s permanent insurance, so you don’t have to worry about losing benefits due to market fluctuations.
@Ridley
That sounds interesting. Can I borrow against the policy while keeping it? What’s the average rate of return? And what happens to the death benefit when I die? Also, how much do I pay for insurance versus savings?
@Gale
Yes, you can borrow against the policy, but it needs to be in place for a certain amount of time before it starts accumulating value. The rate of return is around 6-8%, but can be as high as 12%. If you die, the beneficiary will receive the death benefit. The premium you pay varies based on underwriting. If you get this for your child, they could borrow against it for college without having to repay it, and still have the tax-free retirement benefits.
Gale said:
Why would you want to accumulate cash in a life insurance policy? Wouldn’t it make more sense to buy term life and invest the difference?
Another strategy is to lock in insurability with a term policy when they’re young, which keeps the rates low. If you want to keep it, you can convert part or all of the death benefit to a permanent plan. You can also be the owner of the policy and transfer ownership to your child later as a gift.
Gale said:
Why would you want to accumulate cash in a life insurance policy? Wouldn’t it make more sense to buy term life and invest the difference?
People aren’t usually disciplined enough to invest the rest, so the cash build-up in a say IUL… is pretty great if you look at it in the long term. Can never beat putting in $50k and getting out $2 mil…
I’m with Global Life, and we have a great whole life policy for kids called ‘Head Start’. It’s a $25,000 cash value building whole life policy with no rate increases and benefits that never expire. The child is also guaranteed insurable for an additional $150k by the time they’re 40. If you have any questions or want to get coverage for your child, feel free to reach out!
USAA offers Whole Life plans for kids that you can pay off and the child will have insurance forever.
I offer child whole life policies that give them their premiums back at 18, helping pay for college and they keep the payments until they pass away every 25 years and get another check.
Other carriers like F&G have great plans. The Million Dollar Baby concept is pretty cool!