The name “Smart Start” is used by variety of companies in the insurance and financial services industries, each with a different focus. The one common use for the term is:
Life Insurance for Children: This is a type of life insurance policy designed to give children a financial head start. It’s often a form of permanent life insurance, such as whole life, that includes a cash value component.
Smart Start as a Child’s Life Insurance Policy
This type of “Smart Start” program ia a long-term financial tool for parents and grandparents. It combines the benefits of life insurance with a savings component.
. How It Works: A portion of the premium payments goes toward a life insurance policy for the child, while the rest accumulates in a cash value account. This cash value grows tax-free over time.
. Key Benefits:
a) Future Insurability: One of the most significant advantage is that it locks in the child’s ability to be insured later in life, regardless of any health issues they may develop as they get older.
b) Tax-Free Growth: The cash value portion of the policy grows on a tax-free basis, similar to a Roth IRA or 529 plan, but with more flexibility on how the funds can be used.
c) Financial Flexibility: The accumulated cash value can be accessed by the child later in life for variety of purposes, such as paying for college, a down payment on a home, starting a business, or even for retirement.
b) Affordable Premiums: Because the policy is purchased for a young, healthy child, the premiums are typically very affordable.
Conclusion
Child life insurance, typically a whole life policy, is a financial tool that offers a number of long- term benefits for the child and the family. While it might seem unusual to insure the life of a child, the policy is designed as a long-term investment that can be a valuable asset for their future. When researching “Smart Start insurance,” speak to our regional licensed agent at www.KraljAgencyLife.com. Helping you understand better how Smart Start may be a great savings tool for your child.
