I got a offer for child life insurance in the mail today. Whole Life. Low rates. Cash Value. Coverage for $5,000 to $25,000. No medical exam. My advice is to throw these offers away.
Why? Because they are level benefit whole life coverage. The death benefit always remains the same. A $25,000 policy will always be a flat $25,000: 10 years, 20, 30, 70 years from now. You want whole life coverage with an increasing face amount as a hedge against inflation. This is called “par” or participating whole life. It pays dividends. You get to share in the profits of the life insurance company, so it builds more cash value than “non par”, non participating, whole life that are offered by direct mail.
Par whole life is also inexpensive. MassMutual have the best plans. For example a $25,000 policy for a 1 year old boy is $14.09 a month, for a 10 year old girl it’s $15.09 a month. Applications are a bit longer to fill out than mail offers, but it’s worth it. There are no medical exams.
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