The opening of the contract
Contrary to popular belief, it is quite possible to take out a life insurance contract on behalf of a minor child. Indeed, the prohibition of insurance death benefit over the head of a child under 12 does not apply to life insurance, accidental death which is merely incidental.
However, a certain formality must be observed. Indeed, if the child is under 12, signature of both parents is required for opening and administering the contract. If one parent is not able to exercise parental authority (because he was deposed or died), the guardianship judge must confirm this subscription.
The contract must have a fixed term, not for life. In practice, we may retain such a period of 8 or 10 years. The contract will anyway renewable annually thereafter.
Namely: by age 12, the child must give consent by signing the contract.
The beneficiary clause
Until age 16 the insured minor, the beneficiary clause can only be "my legal heirs." However, from the age of 16, the minor can write the beneficiary clause of his choice, within 50% of the contract value. Insurers in this follow the requirements of the Civil Code.
Life insurance has in this respect a great advantage. Indeed, it prevents the insured to dispose of its funds from 18 years of age, if his parents consider it necessary or desirable. Simply that the beneficiaries of the contract (ie the child's parents) accept the benefit. In this way, even his majority, the child can not withdraw funds without the consent of his parents.
Our advice is to avoid abuse, it is best to set an age limit (eg 25 years) and write this clause with the help of a notary no fax payday loans.
The power of the contract
Long-term investment, the contract of life insurance is ideal for building up capital to fund future education or entry into working life of the child. Accumulated savings being in his name, he will not be necessary to make him a gift: it avoids the payment of fees, at least until the contract is powered by small amounts.
Namely: Pour a donation of a life insurance contract does not relieve the duty of declaring whether it exceeds the framework of a simple donation of use.
Small streams by large rivers, it is advisable to establish a regular savings on the contract. The greater flexibility is allowed: it is possible to suspend, resume, increase or decrease payments freely.
On what media invest the savings?
Some caution is in order if of course the capital comes from an inheritance or gift. The European funds in this case is ideal.
However, if a regular saving is in place, it may be wise to invest some of the equity markets. This is especially true if the child is small: with an investment horizon exceeding sometimes 10 or 15 years, the potential market declines may be offset by gains. In addition, management options that offer the best life insurance now allow secure savings as needed.
Our advice: choose a flexible and scalable contract, so your child can keep when they become adults and take advantage of its prior fiscal.
ALSO READ:
"Life insurance: Cplussur rewarded for his contract
SERVICE:
"To help you understand the solutions life insurance, call the experts CPLUSSUR.COM