Juvenile life insurance is permanent life insurance that insures the life of a child (generally under age 18). It is a financial planning tool that provides a tax advantaged savings vehicle with potential for a lifetime of benefits. Juvenile life insurance, or child life insurance, is usually purchased to protect a family against the sudden and unexpected costs of a funeral and burial with much lower face values. Should the juvenile survive to their college years it can then take on the form of a financial planning tool.

 

Juvenile life insurance  typically has a face value ranging from $5,000 to $50,000; does not require a medical exam, and provides the owner of an unused policy the choice of a distribution of the accumulated cash value or the option to convert the policy into a permanent whole life policy.

 

In recent years, juvenile life insurance has become a popular college savings, lifetime savings, investment, and estate planning tool. It is increasingly popular with financial planners and insurance professionals for the following benefits:

• Buildup of tax-deferred cash value inside the insurance policy.

• A policy can be fully paid in as little as five years.

• Flexible access to cash value. Cash can be withdrawn or received as a guaranteed loan at any time, without a credit check or lender approval.

• Face value is received free of income tax.

• In most states the cash value of a juvenile life insurance policy is protected from creditors and lawsuits.

• If structured using a trust, the ultimate payout of a policy may not be subject to estate tax, or the public and contestable probate process.

• Can be funded using gift tax or generation-skipping tax exclusion amounts.

Williams Insurance Advisers, LLC can advise and help you set up a program that best fits your particular needs. Please call, text or email us for setting up a free advisory meeting.