New parents learn quickly that life insurance is very important to start when they have a baby. Most parents look at policies that will increase in value or have cash values so that they are saving for their children as well as covering them. Life insurance policies are positive steps to take when parents bring home a new baby from the hospital.
Term life insurance:
Parents can purchase a term life policy for their children starting on the day they are born. These policies are usually in $5000 dollar increments. Term life policies are set up for a limited amount of time. Each month the payment is made and the policy does not decrease as time goes by. After a term of 6 months, one year, five years all the way to 30 years, the insured has the chance to reinstate the same policy. Sometimes the rates increase when a new policy is issued. Term life insurance is one of the cheapest ways to insure a child.
Term life insurance does not increase in value or collect a cash value. A policy for children starting out is usually smaller but parents want to make sure they have coverage. Each child in a family will have a separate policy covering them. Parents can do a group policy that has individual names on the policies.