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Children's Policies
Many parents are surprised to learn that their children are eligible for insurance. This could mean the difference between having to pay for college and being able to afford it. For example, if your child has been diagnosed with ADHD, you could be able to get coverage for him or her from your health insurer. There are a few different types of insurance policies available, depending on what you need.
Children Life Insurance Plans
Life insurance policies for children are usually whole life insurance policies. They provide lifelong coverage as long as you pay your premiums. These premiums are guaranteed, so they won’t increase in price. A portion of the premium goes to building your cash value, which can be accessed while your child is alive for any reason.
How Does It Work?
Children’s life insurance can be purchased as a standalone whole life policy or it can be added as an add-on (called a rider) to a parent or guardian’s term or permanent life insurance policy.
Children’s life insurance coverage lasts until at least age 18 and may continue until age 25, depending on the carrier and type of policy you have. Death benefits are also fairly low, at $50,000 or less in most cases. Some policies have a guaranteed insurability rider, which means that additional coverage can be added after the child reaches a certain age or achieves a specific life milestone.
Most insurance companies automatically transfer the ownership of a whole life insurance policy to the insured child when they turn 18 or 21. Some may allow you to transfer ownership at the time of your choosing. In either case, premiums must continue to be paid on time in order to ensure that coverage continues.
With a child life rider or add-on to a qualified adult policy, ownership is usually transferred after a child reaches 23 or 25. If the child wants to continue coverage, they’ll have to convert their existing coverage to a new whole life insurance policy.
Child-Only Health Insurance
Health insurance plans covering children only, with no adults included in the policy, can be found on private and public health insurance exchanges.
The Affordable Care Act (ACA) requires that any qualified health insurance plan sold on the public marketplace must have an equivalent plan for children who are younger than 18 at the start of that plan year.
Child-only plans are also qualified health insurance plans. Insurance companies must offer continuous coverage regardless of pre-existing conditions. This means that if your child has an illness or disease, health insurance companies cannot deny, discontinue, or charge more for his or her coverage.
Affordable Care Act (ACA) also requires that all individual and group health insurance plans include coverage for dependent children under age 26.
Finding the Best Child Insurance Coverage
Finding affordable insurance for children can be a challenge. You have to balance your financial needs with your family’s need for healthcare or future insurability. Tanya Garza Insurance Advisors will take the guesswork out of the search and help find you find an affordable plan for your children. Contact us (hyperlink to contact us page) to learn more about your options.