How Children With Diabetes Can Be Approved For Life Insurance

By Matt Schmidt

Every parent wants their child to have a secure financial future. With so much uncertainty in our world, more parents are considering purchasing life insurance policies for themselves so that their children are provided for in the event of an untimely passing. But it is less often that parents consider how their lives would be impacted by the loss of a child.

The loss of a child and the pain that accompanies that loss are unimaginable. On top of that, it’s pretty certain that if such an unfortunate event did occur, most parents would need a portion of time off from work to begin to process the loss – that means lost wages in addition to funeral expenses.

Fortunately, most parents have the opportunity to watch their child grow well into adulthood. So is it really beneficial for parents to hold a life insurance policy on their child? What if parents are financially secure enough that they to need the death benefit? In the case of children who have diabetes, life insurance is extremely beneficial nonetheless.

The majority of life insurers will not approve a child with diabetes. For children under 18 who have diabetes, life insurance options are rather limited. However, working with an agent who specializes in placing diabetes cases can help increase the likelihood of obtaining a life insurance policy.

Transferable at Adulthood

Many life insurance policies purchased for minor children are transferable to the child when they reach adulthood. This means that a child has the option to maintain coverage regardless of changes in their health status as they grow older. The sooner parents purchase a policy, the cheaper the premium and the fewer health conditions are present that would affect premium and approval.

Build Cash Value Over Time

In addition to a death benefit, a child’s policy has the potential to build cash value over time, so if they would like to attend college, or encounter a financial need, they can cash in their policy to obtain funds. It is important to help parents thoroughly understand the types of policies available for their child and what benefits they present to that specific child.

Whole Life Options

Whole life insurance policies offer coverage for the duration of the policyholder’s life as long as the premiums are paid consistently. Whole life insurance may be easier to obtain, even one someone with a health condition such as diabetes. However, parents may face a higher premium than that charged on a child who does not have a chronic health condition.

Whole life insurance policies build cash value over time, and they are transferable to the child so that they are able to maintain coverage to protect their own family someday. Their premium will never increase after they have been approved and coverage has commenced.

These policies would not require a medical exam, unless it was for a larger amount of death benefit, usually more than $50,000.  After obtaining a policy, should the child’s health ever change for the worse, the terms of the policy would not change.

Term Life Options

For families with chronically ill children who are not able to afford even the most standard whole life insurance policies, term life insurance policies are a great alternative. Offering suitable coverage for the duration (or term) of your choosing, term life policies may not require a health screening and offer more budget-friendly premiums. Do take note, term life insurance policies do not accumulate cash value, so aside from securing a death benefit in the event that it is needed, there are no other monetary values in maintaining this type of policy.

Unfortunately, one downside to the term life insurance option is that it would not be available to a child with diabetes until they reach the age of 16 or older.

Guaranteed Universal Life

Another option for children ages 16 and up would be guaranteed universal life (GUL). It’s important to note that GUL is not whole life insurance. A GUL policy typically does not build cash value over time. This helps keep the payments low throughout the policy length. Some GUL policies can be designed to accumulate cash value.  However to keep premiums lower, most individuals design these plans not for the cash value, but for the permanent insurance.

Whichever policy option parents choose, they are able to purchase life insurance for a child who has diabetes. You can help parents determine which policy will best suit their needs as well as their child’s needs while securing a premium that is affordable for their family.

Matt Schmidt is the co-founder of Diabetes Life Solutions and Diabetes365.org, based in Carnegie, Pa. Matt may be contacted at [email protected].

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