Children’s Life Insurance: To Buy or Not to Buy?

Search the web and you’ll find that children’s life insurance comes with its share of controversy. USA Today reports that only 1% of the life insurance market relates to minors. Here we break down how and why some parents choose life insurance for their child.

How Could I Purchase Life Insurance For My Child?

•   Permanent Life Insurance: These polices make it possible to uniquely insure your child.  Permanent life insurance policies protect the child for their lifetime, as well as build cash value over time. However, the premiums for permanent life insurance policies are much higher but still affordable for minors.

•   Term Life Insurance: Often considered a more affordable option, term life insurance covers a person for a period between 10 and 30 years depending on the policy. Term life insurance cannot be purchased as a standalone policy for a minor. In order to insure your child through a term policy, you can purchase a rider for an additional cost.  This would extend a portion of the policy amount to your child.

For more information on the finer points of distinction between these policies, visit Allstate’s life insurance page.

Why Would I Insure My Child?

•   Unexpected Loss: While this is a difficult possibility to imagine, the tragedy of a child’s death comes with many expenses: funeral costs, counseling, outstanding medical bills, and compensation for additional time off work. Life insurance can provide additional security to indemnify you in case of the unexpected.

•   Secure Insurability: Once a policy is in place, coverage is locked in for your child.  Diagnosable changes in your child’s physical or mental health will not affect their ability to be insured in the future. Additionally, waiting to purchase coverage means certain life choices could affect premiums. High-risk hobbies or a history of drug or tobacco use lead to increased costs.

•   Alternate Form of Saving: With a permanent life insurance policy, cash value can grow tax-free. Having this insurance as a child means money working for you longer. In case of emergency, your child could borrow against the policy’s value or surrender the policy entirely, though these decisions come with added fees.

Things to Think About

Children’s life insurance may not be the best decision for everyone. It’s important to weigh the unique needs of your family when considering any coverage. Contact Melissa Ziegler-Penzato  (985)875-7707at Allstate Insurance to discuss the best policies available for you and your family!

What You Need To Know About Flood Insurance

If you live in an area that is susceptible to flooding like Louisiana, it’s important to consider flood insurance. Many people don’t know that flood insurance isn’t included in their standard home insurance - one of many misconceptions when it comes to flood plans. Here are some common flood insurance myths, debunked by bankrate.com:

You must live on a floodplain to get flood insurance:

This is not true. If you live on a floodplain, your mortgage company will likely require you to purchase flood insurance. If you don’t live on a floodplain, you can still get flood insurance! And it’s generally less expensive to purchase if you do not live on a floodplain.

You only need flood insurance in a high-risk area:

Wrong! 1 in 4 flood claims come from homes not in a floodplain or high-risk area. That means even if you don’t think it could happen to you - it can! You’ll want to be prepared for anything, so consider adding flood insurance to your portfolio even if you believe the probability of flooding is unlikely.

Flood insurance covers everything:

Not necessarily. When it comes to the physical structure of your house, federal flood insurance policies top out at $250,000 - meaning you’ll be at a loss if, say, you have a $350,000 house. But that’s just for the structure itself. For your personal possessions, flood insurance caps at $100,000 under the federal program. If your home and/or personal belongings are worth well above these figures, you can purchase “excess flood insurance” through a private carrier that will cover costs above the national limits.

Flood insurance is included in my homeowner’s policy:

This is the biggest misconception about flood insurance, which may come from water damage being covered in your standard policy (flood damage is not water damage, they are actually two different things!). Standard homeowner’s policies do not include coverage for flood damage, so if you want to add a flood plan to your policy, you’ll need to purchase it separately.

For most people, your home is your most valuable possession. It’s worth protecting, so you will need to take out a separate policy to protect it from flood damage. If you have more questions about flood insurance, or are interested in adding it to your portfolio, contact Melissa  Penzato at 985-875-7707 for more information.