Why Offer Whole Life Coverage On Children?

Most people don’t think about buying life insurance on children because most people think of life insurance as death insurance. Of course, no parent can ever imagine the horror of losing a child, so we have to show them the benefits of life insurance, and tell them to focus on what life insurance does and not what it is.

As we all know, however, the fact of the matter is that the younger the age at which you buy insurance, the better off you are. The premiums are lower and the values are higher.

And we can show this to clients by putting two whole life illustrations side by side — one for a 32-year-old and one for a 2-year-old — and comparing the values. Where else in life can you put in less and get back more?

In addition, buying life insurance on a child or grandchild doesn’t benefit only that person. It can have an impact on future generations. Most people don’t know the names of their great-grandparents, but they might if they knew that great-grandparent had planned ahead and left them a legacy.

Talking with parents and grandparents

Let’s take a closer look at what a conversation with a parent or grandparent might look like.

What holiday or birthday gifts do you usually give your children —the children you care about? Do they remember the game, toy or piece of clothing you bought for them years ago? How did they spend the money you gave them? Will any of these gifts help shape their future?

What if you could give them a gift that:

• They’ll never outgrow
• Is guaranteed to increase in value
• Won’t become obsolete
• Would always keep you in memory
• Won’t lose value in any economy

You have the opportunity to give them a substantial and meaningful gift that will grow as they grow and will be useful to them throughout their lives.

While gifts of toys and clothes are quickly outgrown, you can give a child a head start toward a successful financial future with a whole life policy.

The gift of whole life insurance offers:

• Guaranteed permanent protection as long as premiums are paid. That is something they’ll never outgrow.
• Cash value that is guaranteed to increase and opens doors of opportunity
• Premiums that will never increase

Make it a whole life policy

A whole life policy is a gift that can last children their entire lives, provided the premiums are paid.

Why is whole life such a great gift? Life insurance protection is already in place when they grow up and start their own families. The cash value in the policy continues to grow and can be borrowed against to give them a head start in life — paying for college, buying a home.

You will be doing something for the children you care about that they cannot do for themselves - setting the foundation for their financial futures.

Purchasing insurance now will guarantee that your children or grandchildren will be protected in the future despite any changes in health, and it locks in insurability even if their health changes as they grow older.

There will be life insurance protection despite any changes in health, hobbies or occupation, and the premium will never increase.

There is no better time to start than now. You will be paying less and getting more for the child you love. Purchasing a policy when a child is young is more affordable, guaranteed premiums are typically lower for younger insureds, and the policy has more time to accumulate greater cash value on a tax-deferred basis.

Remember, purchasing life insurance as a gift for children or grandchildren will provide them with a lifetime of protection, a head start on financial security, and cash value growth that can create future opportunities for those loved ones.

Also, you are paying less and getting more by purchasing a policy now. The gift of life insurance makes you present throughout their lives.

Focus on what it does

One of the most common objections we hear is, “Why would I buy life insurance on my child?” A great response to that is, “Forget about what it is, and think about what it does.”

So who is appropriate for this discussion?

• Anyone with special children in their life: children, grandchildren, nieces, nephews, godchildren
• The producers who are the most successful at insuring children are those who bring it up whenever they see children in the picture (which is almost always). There is no harm in broaching the subject — the worst the prospect can say is no. But if you don’t ask, the answer is always automatically no.

The best thing about our industry is that people will always need what we sell. They may not always have a need for a copier, or a vacuum cleaner or a time-share, but they will always have a need for insurance and other financial products.

With every life change (good or bad), financial decisions have to be made, so we have an unlimited and insatiable market. In addition, Americans are aware of the financial needs they have, but most need to be approached in order to take action.

Sonali Virendra, CLU, ChFC, is vice president and national life sales officer in the Sleepy Hollow, N.Y., office of New York Life. Her career with New York Life has included working as an agent, training and developing agents, and wholesaling life insurance. In her current position, she is responsible for managing a national team of life consultants and for growing sales for agents. Her comments here are excerpted from “The Language of Life,” a presentation she gave at the 2015 Million Dollar Round Table annual meeting in New Orleans.