How Term Life Insurance Can Educate Your Children

One of the biggest concerns for a parent is providing for the financial needs of their children, and one of the most important of those needs is for a good education. Many parents start saving for their children’s future even before the child is born. You expect to be there for your child, to help him or her make all the decisions that need to be made and to help provide for their tuition and educational needs. What happens if something happens to you, though? In the event of your death, what will happen to those careful plans for building your child’s education fund?

A term life insurance policy is one way to ensure that your child has the financial ability to pay for education if something should happen to you. Term life insurance is affordable life insurance protection generally aimed at younger adults. It is designed to pay a fixed benefit in the event that the person insured dies during the time that it is in force. Most people take on a term life policy during times when their financial obligations are the greatest. You may opt for term life to make sure that a mortgage or loan is repaid, or to be certain that there is enough money to send your child to college.

Term life is ideal for this for a number of reasons.

You pay for coverage during the times that you need it most.
You need protection during the years your children are young. As your child’s college savings grow, your need for insurance protection decreases. Term life insurance is the simplest type of coverage for a basic simple need – if you die, you leave behind the money that you would have contributed to your child’s education had you lived.

You pay a low premium for a fixed term.
Your need for term life insurance to cover your child’s educational expenses has a fixed time limit. Once your child has finished school, his tuition is no longer a concern. Term life allows you to insure yourself for terms of five, ten, fifteen, twenty or thirty years, and is often renewable without having to prove your insurability.

You purchase only the amount of coverage that you need.
Buying term life insurance to ensure your child’s education makes sense no matter how old your child is. You pay for just the amount of insurance that you need to cover the expenses that have to be covered. If your child is already enrolled in college, a five year term life insurance policy in the amount of the remaining tuition due is the most economical common sense decision you can make.

How to ensure your child’s education is paid for.
Calculate the amount your child will need to pay for college. Don’t forget to include incidental expenses like books and living expenses. While your child is young, take out a term life policy with a level term for up to ten years with a face value of the full amount of tuition. Once your child begins school, you can switch to an annual renewable policy, and decrease the amount of the face value each year to reflect the remaining amount due for tuition and expenses. By reducing the amount of the coverage, you’ll reduce your premiums and save money that you can contribute more directly to your child’s needs. Once your child has finished college, you can cancel the insurance since there is no longer a need for it.