Life insurance is a very efficient savings product. It is therefore judicious to choose it for a child in order to ensure him to profit from a certain sum to start his adult life well.
How Do I Purchase A Life Insurance Policy For My Child?
As a legal guardian, you can take out a life insurance policy for your child from birth. For that, you will have to respect some restrictions.
First of all, if your child is under 12 years old, it is compulsory to include the signature of both parents on the contract. However, if one of them fails, it will be necessary to obtain the authorization of the guardianship judge.
If your child is over 12 years old, it is their consent that will be requested by the insurer when the contract is opened.
Finally, the contract must include a fixed term . However, it remains renewable every year.
How The Life Insurance Contract Works?
You can freely contribute to this life insurance contract throughout its life. You can choose to make a single payment at the opening and make it grow, you can decide to set up periodic payments (by month, quarter or semester) or you can deposit money more occasionally.
In order to be really interesting from a tax point of view, such a contract must exist for at least 8 years . It is therefore the ideal way to prepare long-term savings that your child can unlock when you have decided.
Most often, life insurance subscribers choose an age as the cut-off date (18 years for example) or an important event (the purchase of a first car, etc.)
The Designation Of The Beneficiary Of The Life Insurance Contract.
As long as your child is under 16, the beneficiaries of the contract are taxed . These are his legal heirs, namely, his parents.
After their sixteenth birthday, your child will have the opportunity to designate the beneficiary of their choice. However, he may not attribute more than 50% of the value of the contract to him in order to protect the legal heirs (parents or unborn children).
Opening a life insurance policy for your child is therefore a wise way to prepare an amount of money that he can benefit from as an adult and thus get a good start in life.