Juvenile insurance is a type of insurance specifically provided for people who are considered “children.” The age qualification of a child usually depends on the insurance policy; some policies cover those who are under 15 years of age and some insure “children” or “young adults” under 21 years. Age qualifications can also depend on the area in which the insurance company is located, as the latter should abide by the state’s law regarding minor and legal age. Some advantages of juvenile insurance can include accumulation of cash, reduced future costs, and college funding.
In a historical context, juvenile insurance began to be viewed as a necessity during the 19th century, most probably during the Industrial Revolution. Mortality rates of infants and children during the period were at an all-time high, especially in the urban cities, because of poverty, pollution from factories, and unsanitary housing. Disease outbreaks such as cholera, typhoid fever, and puerperal fever also contributed to the elevated mortality rates, along with the fact that the field of medicine was still yet to emerge. Juvenile insurance policies initially aimed to pay for burial expenses, an idea that was first met with skepticism but gradually became accepted. In time, the policies expanded to meet other needs, such as health, education, and finances.
One important advantage of juvenile insurance is the accumulation of cash and increased value overtime. As a parent continuously and regularly pays the premium, the money allotted for the child increases, along with an interest rate that insurance companies usually provide. The insurance policy is also typically tax-deferred, which means the accumulated amount will not be taxed, even when the amount, in some instances, is used as a loan. This means that the beneficiary can take full advantage of the money, such as for college tuition and capital for business ventures.
In cases of accidents, a juvenile insurance policy can pay for related costs, such as hospital bills and therapy sessions, whether fully or partially. In worse and unexpected situations such as death, the policy holder may receive the full sum indicated in the policy, even if the full amount has not yet been fully paid in premiums. For example, a parent buys a juvenile insurance policy for his child valued at $500,000 US Dollars and has continually paid the premium for six months before the child dies. Even if the parent has not yet paid for the complete value, he may get the full amount of $500,000 USD or a somewhat lesser amount, depending on the policy.
Parents and guardians who are planning to buy a juvenile insurance policy for their children are advised to do so while the child is still young, as premium rates typically increase as the child grows older. Policy ownership is often given to whoever purchased the policy, until the child is legally considered an adult and ownership is transferred to the said child. In some cases, however, the policy holder may choose when to transfer the ownership to the child or whether or not to reveal the policy’s existence at all, although the child is still the beneficiary.