Parents across Canada will be sending their children off to college or university in a few short weeks. For many, this will be the first time their child is leaving home. When considering what your child needs before they leave home, you may want to consider buying them a life insurance policy if they are not already insured.
Purchasing a policy for a young adult has certain advantages. By purchasing life insurance when you are healthy, you can take advantage of cheaper premiums. If you choose to purchase whole or universal life insurance coverage, you are also starting a solid financial investment for your child. This will give your child a head start on an investment plan for their future. You can also choose term life coverage, which will cover the debts incurred by your child in case of death.
While most government student loans will be forgiven in the event of an unexpected death, students generally have other debts that will not be. The majority of young adults incur debt in the form of credit cards, car loans, etc. that will still be owed. Term life coverage can offset these debts, as well as funeral expenses. Parents can purchase a term life policy which will cover their child during their university/college years until the child is in the workplace and able to afford their own insurance.
Buying whole life insurance for your college-aged child has a lot of advantages. Acquiring coverage while the insured person is in good health means that the premiums will be lower. The premiums for whole life coverage can also be spread out over a long period of time. A parent can therefore cover the costs while their child is in school, and then allow the child to take over the payments. This will give your child the advantage of lower premiums because it was bought early on. Whole life policies also have a cash value, so your child will have a head start on financial planning. This can be especially helpful throughout your child’s life.
You may also want to consider the benefits of purchasing universal life coverage. This will allow you to obtain coverage for your child which is flexible. Your child can adjust his/her policy as their needs dictate, such as getting married, having children, buying a home, etc. This type of life insurance allows your child the benefit of having a policy that builds up cash value, but is less rigid than whole life.
It is advisable to discuss these options with your child to determine which type of policy fits their needs and your budget. Take advantage of their current good health status, in order to save them money in the future. Consult with one of our Canadian Insurance Brokers at bakerandbakerbenefits.com who can assist you with any questions or concerns 1-866-369-4474