As a new mother and young active-duty Army wife, Victoria Diamond appreciated the need to insure her family with some level of life insurance. She researched types of insurance and options, then purchased her first life insurance policy more than 20 years ago. She made sure her son, and later her daughter, were covered through a “child rider” add-on.
When her now 24-year-old son’s rider expired a couple of years ago, Diamond helped him purchase his first life insurance policy while he was still young and in good health. Now, she’s doing the same with her 22-year-old daughter.
While the notion of life insurance might be far from the minds of young people, Diamond recommends parents tackle the topic without delay. As vice president and chief financial officer of the nonprofit association Uniformed Services Benefit Association (USBA), Diamond witnesses every day the benefits of helping other active duty and retired service members and their families, and federal employees, reservists, National Guard members and veterans protect against the financial challenges presented by the sudden loss of someone in the family.
The comfort and security of having life insurance in place while you’re young (and often not prepared for unexpected events) is hard to measure, Diamond said.
“Plus, the younger you are when you buy it, the better price you are typically going to pay. That’s a big selling point.”
Get a child rider first
Child riders are common add-ons offered with life insurance, but their terms vary.
For example, the Family Servicemembers’ Group Life Insurance (FSGLI) available to all active-duty military offers a rider for children under 18, and longer if they are full-time students. If a child becomes totally disabled before turning 18, coverage can be extended indefinitely. The life insurance benefit for each child is $10,000.
USBA’s rider covers children starting at 14 days of age through 22 years old. In June, the upper limit will increase to age 26. If a child becomes disabled before their coverage would otherwise end, the rider can continue for as long as the child is disabled and the parent continues their own coverage. Parents can choose one to four units of coverage at $5,000 per unit, for a maximum of $20,000 per child.
About one in five USBA members adds a child rider to their coverage, Diamond said.
Transition as a young adult
When children become young adults, they can then transition to having their own policy, Diamond said.
“If there is a disability, and coverage needs to be extended, complete the paperwork now before you age out of the coverage. That way you will continue to have life insurance protection,” she said. “If you are fortunate to be in good health, take advantage of your youth and apply for your own life insurance while you are insurable. You never know what will happen down the road.”
Over half (52%) of consumers reported having life insurance in January 2023. The top reason given for not purchasing it is the price. According to Life Insurance Marketing and Research Association, however, most Americans overestimate that cost by three times!
Acting quickly as young adults means being eligible in most cases for the lowest rates, Diamond said.
Life insurance options are a term policy — which covers a period of time — or a whole life policy, both offering rates for an extended period, some policies being guaranteed for the duration of the policy. A whole life policy costs more than a term policy at any given age, but the upside is that a whole life premium stays the same for life; it will never change, Diamond said.
After purchasing a term life insurance policy 25 years ago, Diamond recently purchased a whole life insurance policy. She found her rate is double what her 24-year-old son is paying for his own whole life insurance policy. Her son also chose to get a term life insurance policy at the same time, she added, as he is married with additional responsibilities.
Setting worry aside
Some employers offer their employees life insurance, but that benefit can vanish if they leave their employer to pursue a new job, for family reasons, or to start a business, Diamond said.
“If you have your own life insurance coverage separate from your job, you don’t have to worry about getting new coverage when you change jobs or guess at how much it will cost.”
Starting early by providing a child rider that can then take your children into adulthood is not only a way to provide a layer of security and comfort; it’s another way to educate and help your children as they navigate their own path ahead.
Founded in 1959, USBA has provided personalized, exceptional customer service to its members for 65 years. Today, USBA still values the importance of having live customer service representatives who make sure callers are directed to the right person or called back promptly if more information is needed.
Don’t wait for tomorrow — protect your loved ones today with USBA. Visit USBA’s website for more information or to explore USBA’s policies.
