Nijolė Tirevičienė, senior advisor of “Allianz Lietuva”, answers the most relevant questions for parents who conclude a child’s life insurance contract.
Is life insurance for children suitable for those who want to accumulate capital for their children’s future and at the same time put insurance for the child’s present?
That is what it is for. As children grow up sick and suffer various injuries and are treated in the hospital, this service helps to put financial safeguards in place for the present moment. Benefits for parents ease the financial burden in the event of a child’s illness, incapacity for work or additional rehabilitation. The “Student” life insurance contract also includes insurance in the event of the child’s death due to an accident.
Another very important aspect of this service is the accumulation of capital, which is precisely focused on the future of the child expected by the parents, on your dreams. A certain part of the contributions is invested until the child reaches adulthood or another age planned by the parents (for example, up to 20 or 25 years old) and can be allocated both for paid studies and for meeting other needs relevant at that time, for the beginning of the child’s independent life.
Can a life insurance contract for a child help to ensure that in an emergency, if the parents are lost, a safer financial future of the child will still be taken care of, and capital will be accumulated to start an independent life?
You probably know the rule that on an airplane we have to put on our oxygen mask first so we can take care of the person next to us, right? This is also the case with a child’s life insurance policy. We can insure the child against injuries, serious, even critical illnesses, but it is equally important to take care of his financial future in case the child loses one or both parents.
It is for this reason that when concluding the “Allianz Lietuva” life insurance contract for “Student” children, parents or one of them are indicated as the insured. Because they are the people who take care of the child and his life needs every day. Also, such life insurance ensures that even if the parents are lost, the financial future of the child would still be taken care of upon reaching the age of majority or another age specified in the contract.
Not all clients are willing to discuss this issue, but all, after discussing it, leave knowing that they have taken care of their child’s future even if they themselves are gone one day.
What financial safeguards will a child have if one or both parents are lost in a disaster?
“Allianz Lietuva” ensures that by concluding a life insurance contract for the benefit of the child, the parents’ desire to provide financially stable foundations for the child’s independent start of life will be fulfilled.
If a child loses, for example, both parents – who are insured – he is not left without financial protection. It is no longer necessary to pay premiums, and the amount accumulated in the contract is further invested.
The second extremely important aspect is that in the event of the death of one of the parents, the value of the insurance policy is increased to the insurance amount that was already provided for when concluding the contract, and in the event of death, it is doubled. If additional protection is selected during the conclusion of the contract due to accidental death for both parents and this happens, the insurance policy amount is tripled and further investment is made.
To make it easier to understand, I will give an example. Let’s say that the parents concluded a life insurance contract for the benefit of the “Student” child in order to accumulate capital for his future. The insured in this contract is the child’s father, but the child lost his father in an accident. A little more than 1 thousand euros was paid into this contract, probably that the amount paid to the child will be about 19 thousand euros. According to this contract, the accumulated funds are increased to the insurance amount, and the funds will continue to be invested until the child reaches the age chosen in the insurance contract the amount at the end of the contract period will be a real boost to the child’s independent life, which is what the parents sought when concluding this contract.
How do you know that the insurance payment will reach the child himself? That it will not go to, say, guardians, and the money saved for the child’s future will not be used for other purposes?
This service is designed in such a way that the capital accumulated at the end of the contract goes only to the child, no earlier than reaching the age of majority. Capital accumulated for the child’s future is not transferred or paid to the guardian, should one arise, because the guardian undertakes to take care of the daily needs of the child’s life.
The main goal of parents is to provide a financially stable start to an independent life. When concluding a life insurance contract for the benefit of a child, they think about his future, what will happen in ten, fifteen years or more, and Allianz Lietuva ensures that.
Parents, being responsible for the child’s future, with this type of contract ensure in advance that the child has initial financial capital for an independent life and in a lucky case – if everyone is alive and well, and in an emergency – if the child loses its parents.
