I'm Interested in Juvenile Life Insurance - What's Next?

In order to start the process of obtaining a life policy for a child, I first suggest doing further research. Learn what you can of the ins and outs of a juvenile life policy, including the pros and cons. A policy requires premiums — dedicated payments that can be made monthly, quarterly, semi-annually or annually. Since a commitment is required, there may be other financial tools you would prefer for your child’s future that have more flexibility, so the research of multiple products is helpful. For reference, there are different types of permanent insurance, so when you do your research, check out the terms Whole Life, Universal Life, and Indexed Universal Life. You can also search Juvenile Life Insurance as well.

The next suggested step is to take inventory on yourself. Do you have coverage? Most insurance carriers require the parent or grandparent to have insurable interest on themselves before insuring the interest of others. In addition to having insurable interest in oneself (meaning you do have an active life insurance policy), there is a rule on how much coverage one can obtain for their child — which is half of what you have. So for a quick example, if you own $500,000 of life insurance, your child can pursue up to $250,000. Whether or not you elect the full amount is up to you, but you have the option.

Next, consider the right insurance company to align you and your child with. Not all insurance carriers have permanent insurance, and even for those who do, it’s possible they have very basic plans, or do not spend much time and resources in that department. In addition, it’s good to know how companies are rated. You want to know a company is doing well financially, if they have good customer service, and that they want to be in business for a long time. A.M Best is one way to see who the top carriers are in the industry. Another good reference is the Comdex Ranking, which takes A.M Best and others like Moody’s and S&P, into a pool for overall review. Google and other search engines now comprise lists of the top companies you can view, which typically are updated every year.

The final step is to work with a local or national agent, broker or financial representative in order to submit the preliminary items needed. This requires an application (many are now e-applications for sake of convenience), which is submitted to the insurance carrier. The insurance company underwriting team will then complete a health background check of the child before determining their rating. Once the child is approved, they are given a rating, which ultimately dictates the cost of coverage. When you are given an offer, you do not have to take it if you do not want to. In addition, depending who you are working with, it is possible to see how other carriers would look at a situation. So for example, if an insurance carrier gave your child a lower rating because of asthma, you could pivot to see if any other carriers would be willing to give a better offer. This would be subject to further review from their underwriting team, but it does keep all options on the table. When you have decided you want to put the insurance policy in place, it is a matter of signing the plan and setting up payment. In terms of payment, all carriers accept bank draft or check. Some recent good news is that some carriers, and more to follow, are starting the introduction of credit card payments as a payment option as well. When the first premium payment is made, the coverage is officially in force.