COMMENTARY: What about the grandparents raising children?
According to the U.S. 2010 Census, there were more than 2.7 million households with grandparents raising their grandchildren. Census Bureau reported that 67,000 Louisiana grandparents are responsible for meeting the needs of grandchildren. The reasons why are varied.
There are cases where the parents are unable to care for the children because of drug abuse. Or the parents themself are struggling financially and grandparents have stepped in to help raise the child. And sadly some are raising their grandchildren due to domestic violence. Many were not prepared to do this all over again as they enter retirement age.Believe it or not, some grandparents are still in the workforce.
The toll taking on the role of parent can be great. Increased household expenses, mental stress of the realities of raising children again.Not to mention having the energy to keep the children involved in extracurricular activities.
What is also not realized is the legal and financial realities. There are grandparents who go through the process of getting guardianship of their grandchildren or the parent will sign a power of attorney. Doing this will allow them to make more decisions for the children while the parent still retains parental rights.
What about life insurance ?
In the middle of raising grandchildren grandparents can easily overlook having life insurance coverage for themselves and the grandchildren. According to LIMRA 2016 Facts About Life, only 44 percent of U.S. households have individual life insurance. That includes the grandparents raising their children.
Thankfully life insurance rates are not as expensive as some would have you to believe.For grandparents over 50 who do not have life insurance they have options available to them for coverage.In addition there are policies that will not require medical exams.
One would be a final expense burial life insurance policy. These are small face whole life insurance policies that will take care of their final expenses. Another option would a guaranteed universal life policy. This policy acts like a cross between term and whole life insurance. The death benefit is guaranteed up to certain age, while the policy accumulates cash value. An option younger grandparents may like.
Then finally we have term life insurance.A term policy will terminate after a set number of years up to 30. It will provide pure life insurance for a grandparent. However the price of term life insurance can be pricey for individuals in their late 50′s into the 60′s. Some policies have questions that will automatically decline older clients. In addition the amount of coverage allowable decreases around age 64.
Coverage for grandchildren ?
In each example I cited above, grandparent can purchase a term rider to put their grandchildren on the policy. A rider is simply an add-on allowed to the policy at the time of applying. The term rider will put term coverage on the grandchildren until they are either married. Or they age out of the term coverage. The exact age varies by company. By the way a grandparent has another option at their disposal.
Companies do sell whole life insurance policies for children ages 14 days old up 17. For the most part they are very inexpensive. Not to mention, the child can keep this policy well into adulthood. One carrier I personally use will you to purchase as much as $50,000 of life insurance on a child.
Grandparents are being called to duty again as parents. They are answering the call with love and attention. At the same time we should make certain they have knowledge and access to affordable life insurance. Not only for them, but also the grandchildren they are raising.
Submitted by Thomas Dickson
Thomas Dickson is a licensed independent life insurance agent in Baton Rouge, La. His company is Acadian Insurance Group. Specializing in senior life insurance. He can be reached at thomas @ acadianinsurancegroup.com