Jumping Juvenile Insurance
A type of whole life insurance policy purchased for children that automatically increases coverage at age 21 without requiring a medical exam. The policy "jumps" from the original face amount to typically five times that amount when the child reaches adulthood.
Example
“Sarah purchased a $10,000 jumping juvenile insurance policy for her newborn son, knowing it would automatically increase to $50,000 when he turned 21.”
Memory Tip
Think "jumping to adulthood" - the coverage jumps up when the child becomes an adult at 21.
Why It Matters
This insurance locks in insurability for children at young ages when they're typically healthy, protecting against future health issues that might make them uninsurable. It also provides parents with an affordable way to secure substantial life insurance for their children's future financial needs.
Common Misconception
Many people think the premium jumps up with the coverage increase, but typically only the face amount increases while premiums remain level. Some also believe you must requalify medically for the increased coverage, but the jump is automatic and guaranteed.
In Practice
A parent buys a $15,000 jumping juvenile policy for their 5-year-old daughter, paying $25 monthly. When the daughter turns 21, the coverage automatically increases to $75,000 with no medical exam required, while the monthly premium stays at $25. This provides the young adult with substantial life insurance coverage at an extremely low cost that would be impossible to obtain at age 21 with a new policy.
Etymology
The term "jumping" refers to the automatic increase or "jump" in coverage amount that occurs when the insured child reaches age 21.
Common Misspellings
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