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Be Wise With Money

Freedom Not to Worry, Now & Later

Juvenile life insurance protects children no matter what happens health-wise

When Leigh Anne Charles was 12, her parents bought her a juvenile life insurance contract. They had no idea that at age 19 she would be diagnosed with type 1 diabetes. That diagnosis immediately changed not only her health, but also her financial future: Diabetes can make it difficult and expensive for someone to purchase a new life insurance contract.

Twenty years later, Leigh Anne is a married mother of two kids. She still has the juvenile life insurance contract her parents purchased, and she knows it will help the family's finances if she dies prematurely. And because of her own unexpected health journey, she recently worked with Jim Elliott, her Thrivent Financial representative in Hickory, North Carolina, to purchase life insurance for her children.

Jim explains the benefits: "Buying life insurance when your children are young ensures that no matter what happens health-wise – development of a heart condition, for example – you've given them insurance options for when they become adults."

When Leigh Anne's parents bought her contract, for an additional premium they also selected a guaranteed purchase option, or GPO. This lets the insured person purchase additional life insurance at set intervals in adulthood – without a medical exam – no matter what has happened to the child's health.

In Leigh Anne's case, with the GPO on her contract, she can purchase more life insurance at rates she would not be able to get now because of her diabetes. In general, it's an affordable option against the unpredictable.

Elliott uses this hypothetical example: "Generally, for less than $20 a month, parents can purchase a $25,000 contract, with the guaranteed purchase option, for a healthy 9-year-old child," he says. "With current contracts, if she used every GPO option, she would end up with $565,000 in life insurance. The No. 1 reason you're buying this is to protect your child and your child's family down the road."

On top of the benefit of having insurance coverage in the future, if the contract is a whole life or universal contract, it can build up cash value that may also help that child in the future. And while no one wants to think about the worst case scenario of a child dying, life insurance will provide financial security for the family if the unthinkable happens.

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