Florida Health Insurance Terms:
"Juvenile Insurance"

What is: "Juvenile Insurance":

This is the type of insurance policy you buy for your children. These are most likely a "whole life" policy.

Most gifts lose value over time. A permanent life insurance policy, on the other hand, has the potential to accumulate cash value each year. Cash values can be borrowed for any purpose — to provide a down payment on a first home, to help pay for college, to capitalize on a business or other opportunity even to help fund a comfortable retirement decades from now. (Note: Borrowing or otherwise using cash values can reduce the death benefit.)

There are tax advantages. Under current law, cash values that accumulate in the policy are tax deferred. Even when cash values are borrowed, there may be no tax consequences in many instances. Finally, proceeds received by beneficiaries are generally not taxable as income. Consult with your tax advisor for more details.

Juvenile insurance provides a minimum of protection and could provide coverage, which might not be available at a later date. Amounts provided under such coverage are generally limited based on the age of the child. The current limitations for minors under the age of 14˝ would be the greater of $10,000 or 50% of the amount of life insurance in force upon the life of the applicant.

The limitations on a minor under the age of 4 and one half would be the greater of $5,000 or 25% of the amount of life insurance in force upon the life of the applicant. Juvenile insurance may be sold with a payor benefit rider, which provides for waiving future premiums on the child’s policy in the event of the death of the person who pays the premium. Further details - Juvenile Insurance: Insurance Terms

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