Losing a child will always be traumatic. At such a time of grief, you should not have to think about financial concerns. That's one reason why New York Life offers a Children's Insurance (CI) Rider: so, at such an emotional moment as the death of your child, you need not worry about final expenses. However, though this rider protects you against the financial loss associated with the loss of a child, it is not the only reason for buying such a rider.
A CI rider will expand your coverage to encompass your child without buying your child a separate policy. On Whole Life, Increasing Premium Term and Modified Premium Whole Life policies, one unit of CI coverage (one unit is $1,000 of coverage) costs only 45 cents per month (47 cents if you have Waiver of Premium). Assuming there is no Waiver of Premium, if you were to purchase the maximum protection of 25 units ($25,000), then that 45 cents per unit would amount to $11.75 each month. Though it is a small premium for the amount of protection, you may be thinking perhaps with a loving or a musing smile that your children are a (financial) net loss, and that they do not need to be insured because they do not generate any income. Once you ask this question, you are ready to see that buying the CI rider is definitely not a "die-to-win" purchase.
The real power of the Children's Insurance rider is in its conversion benefits. When your child reaches age 25 (or gets married, whichever comes first), he or she will be eligible to convert the CI rider into a permanent policy without additional underwriting. In fact, the CI rider can be converted still without additional underwriting - to a policy with a face amount of up to five times the value of the original rider. For example, if you bought 25 units of CI coverage, your child would be able, at the appropriate time, to purchase $125,000 of coverage at standard rates without having to prove insurability. If your child would not otherwise be eligible for standard rates, the CI may save her a substantial sum of money when it comes time to purchase her own protection.
Perhaps the most important aspect of the CI rider is how it can serve to show your children the value of protection. Its purpose is not just to protect you from the financial implications of a child's death, nor is it simply to potentially save your children money when it comes time for them to buy life insurance for themselves. Rather, the CI rider can help show your child the value of protection and, in so doing, help your children get started protecting themselves and their children. Contact a local New York Life agent today to find out more.
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