Conventional wisdom dictates that a person doesn’t need life insurance if no one else depends on their income. While mostly true, there are many reasons why you should have small life insurance policies for your children and grandchildren.

Insurability and Low Premiums

A young child will likely have lower premiums and greater insurability. For example, a $10,000 policy for a five year-old costs only $8.20 per month.  Buying a child’s policy not only locks in lower premiums, but can also guarantee insurability later in life. For example, a member can obtain a $10,000 to $50,000 AAFMAA Generations Plus life insurance policy for their children and grandchildren under 14.  You lock in this low rate before the child turns 14 and the coverage amount doubles automatically at age 18 with no premium increase. The policy guarantees the ability to purchase additional insurance with no medical underwriting or physical exams.  The child can ultimately purchase AAFMAA insurance totaling 10 times the initial policy. So that inexpensive $10,000 policy includes the ability to purchase up to $100,000 of insurance, regardless of future health conditions. 

Cash Value Growth

A Value-Added Whole Life insurance policy provides attractive cash value growth. Access this cash value at any time using a policy loan. Or, if you cancel the policy, you get a return of all premiums paid, or the cash value – whichever is greater. For example, for a two-year-old granddaughter, you can purchase a $50,000 Value-Added Whole Life policy for just $34.28 per month and fully paid up after just seven years. You can relax and breathe easy knowing you provided permanent insurance protection, cash value growth, and no premiums for the rest of your grandchild’s life.

Funeral and Burial Expenses

From a practical perspective, in addition to the emotional devastation, parents also face significant expenses in the event of a child’s death. According to the Natural Funeral Directors Association, the median cost of a funeral with burial exceeds $7,000. However, depending on locality and circumstances, the costs could be much higher. Purchasing insurance for children alleviates the significant financial burden for a family coping with a tragic loss. 

Ability to Access AAFMAA

An AAFMAA policy also entitles the child to take advantage of AAFMAA’s other products and services, even much later in life. AAFMAA serves only active military, Veterans*, and their families. However, if a member purchases a policy for a child or grandchild before they turn 24, that person becomes eligible for all AAFMAA products and services as long as that policy remains force. This includes access to not only best-in-class insurance, but also mortgages, financial planning, wealth management, and trust services. Many parents purchase inexpensive policies for their adult children and grandchildren between the ages of 18 and 25 just to lock in that access to AAFMAA. A $100,000 Level Term I policy costs just $8.95 per month, and provides a fixed premium and death benefit to age 50 (age 40 for nicotine users).  Then, when the child has their own family and a greater need for insurance, they can purchase their own AAFMAA policies, even if they are not in the military.

Buying a life insurance policy for your child or grandchild provides important financial security to your family for years to come.  Call AAFMAA’s membership team at 866-330-0583 or get a quote for your child or grandchild today at www.aafmaa.com.

*Membership in AAFMAA is for military, veterans and their families subject to certain terms and conditions.

This article was originally published August 20, 2021.