If you are a parent, you understand the importance of keeping all the financial items of your family in order. You have probably are ready purchase life and disability insurance, have a strong 401(k) and have an established emergency fund. You may think you have everything your child may need when it comes to insurance.

Well, you may be wrong. This is a great time for parents or grandparents to think about purchasing juvenile life insurance. This type of life insurance is often misunderstood. In fact, many people become fearful and confused when the topic of juvenile life insurance comes up. I mean, who wants to buy insurance for a child that is perfectly healthy?

Luckily, it is extremely rare to lose a child. Though juvenile life insurance does cover death, there are other kinds of insurance that will protect the financial future of your child in ways nothing else can.

There are three basic types of juvenile life insurance available:

  1. Permanent juvenile life insurance: this coverage is not only permanent as long as you pay your premiums, but it can also accumulate value over the years the same as life insurance for adults does. These policies can be purchased at a lower rate with limited underwriting which is what my friend who does permanent makeup in Atlanta. The parent or grandparent owns the policy until the child turns 18. At that point, the child assumes ownership.
  2. Term life insurance for juveniles: this policy costs less than permanent life insurance but comes with more restrictions. This insurance lasts a specified length of time and has no cash value. Throughout the life of this policy, the policy owner pays a set premium for the term then, once the term expires, they can repurchase the coverage at a more expensive rate.
  3. Group life insurance for juveniles: an employer will occasionally offer juvenile life insurance through their group coverage. These can be very convenient, but you must remember that employee benefits can change over the years and life insurance policies can be difficult to take with you if you leave your job.

Juvenile life insurance can help lay a firm foundation for your child’s future financial stability. Consider purchasing it for your child.