You do a great job to help your clients understand the benefits of life and critical illness insurance, save for retirement and create an emergency fund – all to ensure that their financial future is secure. However, have you discussed what is available to help them safeguard their children’s financial future as well?
Many parents rely solely on a registered education savings plan (RESP) for their children, but juvenile insurance can be another fantastic addition to the financial plan, combining both savings and risk management into one single policy. Given their young age and relatively good health, juvenile insurance can be inexpensive; even a small amount of premium can generate additional investments inside a permanent life insurance policy. Perhaps more importantly, is the fact that it can lock in the child’s insurability for a lifetime, allowing them to easily acquire additional insurance in adulthood when they want to insure for the financial well being of their own family.
Health, lifestyle and career choices later in life may make the child uninsurable or subject to higher premiums. By locking in their insurance rates at an early age for the coverage purchased in childhood, and locking in their health status for future optional insurance purchases, such obstacles can be eliminated altogether and provide them with coverage for life.
When insureds are of age, they can assume policy ownership, all the policy benefits including any cash values and future insurance purchase options, as well as responsibility for any remaining premium payments scheduled. Many juvenile plans even have quick pay options, giving parents the ability to fully pay up policies before passing them on to their adult children.
Permanent life insurance with cash values and critical illness insurance with return of premium are the two most common juvenile coverages. They do not have to be large amounts either; an insurance plan can be built on any budget and due to the limited underwriting, juvenile plans are usually easy to set up and quick to settle.
Cash value in life insurance, or the return of premium in critical illness insurance can also be accessed by the child at a later date to help fund university costs or make a down payment on their first home – the money is not restricted to a post-secondary education like an RESP may be, making juvenile insurance an excellent addition to your child’s financial plan.
Finally, since we are talking about an insurance plan, it can provide a safety net to cover expenses or reduced parental income should the worst-case scenario happen and a claim is required.
No parent wants to consider the possibility of his or her child becoming seriously ill, or worse dying, but the reality is that it can happen. Insuring a child or grandchild is probably the last thing your client wants to think about, but it does make sense for you to initiate this conversation with them. There are a variety of statistics available, highlighting the need for this type of insurance. However, the best approach may be to focus on the long-term value and asset building features of juvenile insurance. In fact, it can be a great add-on to an already running discussion about education savings.
Whichever approach you decide on, discussing the benefits of juvenile insurance planning is a great way to engage multiple generations and build up your client base for the future.