Many parents understand the temptation for young adults to cash out their permanent life insurance. Because of this, some wait to turn over ownership until their children are out of college and earning a full-time income. Even then, parents can struggle to explain why not to cash out the life insurance to pay for a new car or repay student loans.
Here are a few talking points to help start the conversation with your son or daughter.
“Your life insurance certificate has value beyond its cash value. As parents, we purchased your coverage when rates were lowest – both in case something happened while you were young and to lay the cornerstone for your financial future. Even if you receive life insurance through your job, it’s important to always have some protection that’s both permanent and portable if you change jobs.”
“The coverage can grow with you through all stages of life. Many life insurance certificates include a guaranteed purchase option.* This allows you to buy additional amounts of insurance at specified ages and as you take on new responsibilities (such as starting your own family). Best of all, there’s no health exam. You’re young and healthy now, but you never know when you could become ill and unable to qualify for insurance. The permanent life insurance certificate we bought for you ensures you’ll always have protection.”
“You can use your life insurance certificate to bail you out without cashing it out. You can borrow from the cash value as a sort of emergency fund without losing the death benefit protection. Loans must be repaid ** with interest, but the interest is much lower than what most credit cards charge.”
Need more help?
Ask your local Modern Woodmen of America representative to talk with your whole family about the importance of life insurance at any age. Help smooth the transition as your child reaches adulthood and starts facing his or her own financial needs.
* Available at additional cost
** Unpaid loans can reduce the death benefit and may result in a taxable situation
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Additional products and services
Talk to a representative to see what's best for you.
Term life insurance
Term life insurance provides low-cost protection and peace of mind for a certain period of time. While permanent protection is an important part of an overall life insurance plan, term insurance can protect you by helping to cover temporary needs, such as helping to pay off your mortgage or other debt. This can be an affordable way to help make sure your dreams and goals are protected.Learn more
Birthday Book Club
This benefit provides free books for children when all of the members in their household are also Modern Woodmen members. During their birthday month each year, qualifying children ages 1 to 16 will receive a free, age-appropriate book.