Shopping for life insurance in NJ is pretty easy because most children are healthy and don’t require a medical exam. It’s important to note, however, that coverage is usually limited to a maximum percentage of the parents’ coverage, and siblings must have equivalent amounts.
With that out of the way, let’s get down to business. Here are the steps to follow when choosing a life insurance policy for your child.
First, the Benefits.
Most parents start by comparing a 529 plan to a whole life insurance policy. Both have their benefits, but there are a number of reasons why we feel the upper hand goes to life insurance:
- Permanent life insurance policies include a death benefit and a savings account. 529 plans do not. They are simply a savings tool for college-related expenses.
- Your child can borrow against their savings account to pay for things like college, a new home or a wedding. The money in your child’s 529 plan can only be used for college.
- 529 plans count as an asset when you go to apply for financial aid. This can lower the amount of help you get. Life insurance policies are not considered an asset, allowing you to get the full amount of aid.
Steps to Selecting Whole Life Insurance for Your Child
- Contact a financial advisor. Because there are so many different policies out there, it helps to speak with a financial advisor in NJ who can answer your questions and compare the differences between a 529 plan and whole life insurance.
- Fill out an application. Your financial advisor can run several quotes for you. All you need to do is fill out an application for your child. It’s simple - don’t worry! Kids are usually healthy and don’t require a life insurance medical exam.
- Look over your quotes. With your financial planner in New Jersey, look over your quotes. Insurance policies vary slightly. Fortunately, no matter which policy you choose, your interest rates are locked in.
- Take over a policy. Once you decide on a policy, you’ll be the owner of it until your child is an adult. You’ll have options to pay off the policy or stretch payments out across many years. When your child is an adult, they’ll become the owner and can take over the payments.
Ready to Find a Life Insurance Policy? Contact Us Today.
Leonard Financial Solutions offers whole life insurance in NJ from a number of different carriers. Contact us today and we’ll be happy to go over your options and the policies that best fit your needs.