Usually, when we think of
insurance, we picture a sole
bread-winner or a spouse. There is
life insurance for minors and in some
rare cases, it might make sense.
Let look at situations where life
insurance on minors makes sense and what
the parameters might be.
first law of life insurance is there
needs to be a vested interest in the
life of the person being insured.
This means that I cannot take out a
policy on my neighbor (unless of course,
she's my spouse and we have a really
strange relationship). This might
work in the world of Big Love, but for
is usually within a family or structured
around business uses. Life
insurance for minors are subject to this
same litmus test.
common reason for life insurance is to
offset lost income or pay down
debts/expenses. Based on this,
there are only two apparent needs for
purchasing life insurance on a minor.
One is that the minor has income and
we're not talking the paper route.
A child star might be an example but
this is pretty uncommon. In this
case, the family is probably financially
dependent on their minor child.
company may request the basis
for the proposed insurance especially
for larger amounts of term life
insurance coverage. On the flip
side, it's hard to see how minors would
have assets or debts unless they were
especially precocious. It might
make sense to provide the equivalent of
for minors in spite of the depressing
thought of it. This would provide
a smaller term life benefit to provide
for potential (though unlikely) funeral
expenses, travelling, lodging, etc that
results from the death of a minor.
This use of term life is pretty rare and
probably falls under the category of
over-insurance. Can you believe
you just heard that coming from a life
insurance agent? Again, life
insurance is about peace of mind so if
this type of insurance on a minor makes
you sleep better at night, then by all
look at some of the parameters of minor
life insurance. In most states, up
to a certain age (around 14 on average),
a minor can cancel a policy and receive
part of the premium back since the
contract was entered in on their behalf.
The legal age as it pertains to entering
into a contract between a minor and a
life insurance company resulted from
this ability to back out. The
beneficiary usually has to be a close
to HIPAA privacy laws and other
protections of privacy, the minor
applicant will usually have to authorize
other documents such as request for
medical records, MIB (Medical
Information Board), and FCRA (Fair
Credit Reporting Act) authorizations.
What's our take on life insurance for
minors. The occurrences that merit
such coverage are usually very unique
and rare. Usually, the situation
is so unique that it demands life
insurance such as with the child star
scenario mentioned above. There's
only so many young Michael Jackson's so
we feel that
premium is better spent where
the real risk of financial catastrophes
can be found...the primary earners for a