Accident Insurance For Children - Have You Thought About It?
Accident Insurance
"Accidents happen, children happen."
"The other day I was in a store and my sister slipped on some ice. She had some scrapes, but she was fine."
"That doesn't sound bad."
"She fell down the stairs later that night and broke her leg. We had to use our life insurance policy to cover the hospital bills."
Accidents happen. Children happen too. Kids break their bones, get hurt while playing sports, slip climbing trees or while washing dishes with their parents in the kitchen sink. They also can fall down stairs or even off of a playground slide and get badly injured... or worse, get killed.
"How much will it cost us to provide accident insurance for our child?"
That's what you and your family need to find out. Some insurance companies offer term and permanent (whole) life policies that include accident rider options. Term life policies offer lower premiums, while permanent life insurance policies generally offer higher amounts of coverage but are more expensive over the long-term.
Accident Insurance These coverages pay a death benefit to your child's beneficiaries if he or she dies as a result of an accident. They also pay for expenses related to treating the injury, including rehabilitation costs and lost wages, if any. Some coverages may provide a cash benefit for funeral expenses or burial costs. Accident rider coverage works the same way as term life insurance policies, but are designed to cover any accidental injury or death that might result from an accident, regardless of age.
Frequently Asked Questions
"What is the difference between a term and a permanent policy?"
Term life insurance policies are typically offered for a set period of time (typically 10 years,) and then purchased again. The premium is kept the same (or similar,) but at the end of the term period, you have to either renew it or buy it again. Permanent life insurance policies are usually offered as single or multiple-policy contracts and continue permanently. Premiums vary depending on where you live and how much coverage you need.
"How do I compare term, permanent and accident rider policies? Which one will work best for me?"
You can compare the features of a variety of different policies by doing your research online. If you can't get in touch with an insurance agent or broker, other sources include the Internet, local newspapers or phone books. You might also try asking friends for advice or researching it on a website like this one . All agents and brokers work with various insurance companies to choose the best option for you based on your needs.
"Do we need to buy permanent life insurance if our child is covered by daycare?"
No. If you haven't started your policy yet, talk to an insurance agent, broker or financial advisor about what you need. If you know your child is in daycare and accident insurance is high on your list of priorities, it can be an option for you.
"How much will a permanent life insurance policy cost?"
Permanent life coverage varies depending on the amount of coverage and where in the country you live. For example: California residents may pay between $500 and $1,000 annually for a whole life insurance policy ($500 per month.) It will take over 20 years to pay off a $10,000 policy fixed-premium term plan (it starts at age 65) with a life insurance quote from The Henry J. Kaiser Family Foundation. Check with your insurance agent, broker or financial advisor to get a good idea of how much coverage you and your family need.
"What do we do if our child gets hurt at school?"
Talk to your insurance agent or broker about what coverage is recommended for that kind of situation. If you already have accident coverage, that may be enough. If not, discuss it with your insurance agent or broker. Your options include picking an additional rider on the policy (which will result in higher premiums,) buying a separate policy (which may or may not be more affordable,) going without the coverage entirely, or re-evaluating the type of coverage you need to meet all your needs and those of your family .
"What else should we consider?"
Review your insurance needs regularly with your advisor. Make sure you are still on track to meet your financial goals and that you have the right type of coverage for each life stage of your family. You will also want to keep in mind things like family medical history, any pre-existing conditions or allergies, etc. You may want to change the amount or type of coverage you carry in the future, if necessary.
"What does it cost to provide accident insurance for our children?
"The average term life insurance policy for a healthy 35-year-old male costs about $2,000 annually . Permanently insured adults in their mid-30s pay an average of about $7,100 over five years. A review by the U.S. Department of Health and Human Services estimates that insurance premiums are fairly stable: The average annual premium for 20-year olds was $1,942 in 2008. For 30-year olds, it was $2,642; and for 40-year olds, it is $2,896. With Whole Life Insurance, the older you are, the more you pay for coverage. That's because of the cash value the policy builds up over time. The premiums reflect that extra money (so if you're 35 and healthy - figuring about $35/month for five year - it could equate to about $4,000 in premiums.)
"What is Accidental Death & Dismemberment Insurance?
This policy provides a benefit if your loved one dies from accidental causes and dismemberment benefits if a covered accident causes amputation or loss of sight in one eye or hearing in one ear. The costs are relatively low - an average of $5-$10 per month depending on your age. The premiums will be deducted from trust funds or other savings accounts if you choose.
"What is the minimum amount of life insurance I need to provide for my children?"
The minimum required for a term insurance policy varies according to state law and how much coverage is included in your policy. Typically, states require at least $50,000 in coverage, but some extend it up to $100,000. The minimum required for a permanent policy depends on the amount of coverage you choose and how old your child is when he or she starts school. The generally accepted rule of thumb is that if you are age 40 or older, you need three times as much life insurance as if your child were age 5.
Conclusion
Life insurance companies, brokers and financial advisors are eager to help you pay for life insurance. They work with various companies so that they can find the best option to fit your needs.
Permanent life insurance can be a good way to provide for your family during your children's most formative years. It is also the best choice for middle-aged parents who are healthy and looking forward to enjoying their retirement years with their families.
More information about term life, accident riders, accidental death & dismemberment (AD&D) coverages, pre-existing conditions and comparisons between whole life and term policies can be found at www.TheHenryJKaiserFoundation.