Life Insurance for Children [2023]

Should I buy life insurance for my child? We often get questions about life insurance for children from customers and others visiting our website. If you posed this question to a group of insurance or financial advisors, you would surely get a heated debate along with a mixed bag of responses. We all wish there were a simple answer to it but, like most things in life, your unique circumstances and perspective will dictate what’s best for you and your family.

Understanding how to buy life insurance for a child means first identifying your goals for establishing a comprehensive insurance profile. Learning what and how much you need for any type of insurance means getting rates from the best providers. How much life insurance do you need for a child? We’ll help you decide.

Get child life insurance quotes now with our free rate tool and then learn how to buy life insurance for children in an affordable and smart way. 

Types of Life Insurance for Children

What is the best life insurance for a child?

There are three types of life insurance available for children:  term life insurance, a term life rider, and whole life insurance. The best life insurance policy for a child depends on your specific goals and needs. Let’s break down the best child life insurance plans.

Term Life – Term life is inexpensive, affordable life insurance for children and provides coverage for a particular period or term. You can purchase a term policy for $20,000 coverage on a 4-yr old child at a monthly rate of about $7.08 from Genworth life insurance company.

Check out this overview of sample rates that we’ve gathered to give you an idea of how low cost insurance for your child can be per month.

Considering that term life insurance quotes for adults can be almost double that rate, locking in a lower rate as a child might be a good idea over the long run, especially if the child has longer-term health concerns.

At age 30, your child would have the option of extending the coverage on the policy, replacing the policy with a new one, or converting the policy to a permanent policy such as Universal Life. Keep in mind all of these options would be at a much higher cost at that time.

Term Life Rider – A rider is an additional benefit added to an insurance policy. In this case, a children’s term life rider would be added to a parent’s policy.

These riders max out between $10,000 and $20,000 worth of coverage and will cover your dependent children to a specific age, usually 23-25. You can purchase a children’s term life rider for $20,000 coverage at an annual rate of $120.00 from Protective Life Insurance Company.

It’s important to note that one rider covers all of your eligible children. You don’t need a separate one for each!

Whole Life – Whole life insurance provides permanent life coverage. Unlike term life, coverage continues as long as the premiums are paid.

A popular whole life insurance policy for children offers $5,000 coverage on a 10-yr old child at an monthly rate of $3.27 from Gerber Life Insurance Company, depending on the state you live in.

The rate on their Grow-Up Plan will vary depending on your state and your child’s gender. Some nice features of the plan are coverage doubles at age 18, the premiums never increase, and the policy builds cash value.

Gerber Life Insurance also offers a similar plan that acts as a combination policy for child life insurance and  college fund. They might not be the best whole life insurance policy for your child, however, so shop around.

What is the youngest age you can get life insurance?

Child life insurance is offered for children as young as six months of age. Lower rates can be locked in for parents who purchase insurance earlier. This also allows for a longer time window to accumulate cash value. Of course, if you opt for term life insurance, you would not accumulate any cash value and your plan would simply expire when policy premiums are not paid. 

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Pros and Cons of Child Life Insurance

Let’s look at a quick summary of the pros and cons of child life insurance before we consider whether you should buy life insurance for a child. 

Reasons to Buy Life Insurance for Children

• Provide a Savings Plan
• Lock-In Insurability
• Protect Student Loans
• Provide Financial Support for a Grieving Family

Reasons Not to Buy Life Insurance for Children

• Children Have No Income to Protect
• There are Better Savings Vehicles Available

Should I buy life insurance for my child?

In a recent CNNMoney Ask the Expert column, Sarah Max asked the question, “Should I buy life insurance for my child?” Sarah included expert opinions on the value of insuring a child against premature death versus utilizing those premium dollars to build a college fund instead.

The consensus was to invest the money and forego life insurance. But the primary discussion was about whole life insurance, which is where most people wonder which insurance policy is best for children’s insurance?

As Sarah and the experts point out, whole life insurance builds cash value and can be used to guarantee a person’s insurability should she become seriously injured or develop an illness later in life.

But those features come at a steep cost in the form of fees and other charges, which can slow the cash value growth and delay the return on your investment for decades.

Thankfully, there’s a better way — which we’ll get to shortly. But first, here are some expenses that a child life insurance plan will cover.

Final Expenses

The National Funeral Directors Association estimates the cost of an average funeral in 2013 was approximately $7,400.  According to the Bureau of Labor Statistics, funeral costs have risen over 20 percent since 2013. 

Finding that much money for an unexpected funeral is difficult for many people. If you don’t have savings or a suitable emergency fund, a life insurance policy can help if you could not afford to provide a proper burial for your child.

Time to Grieve

This is the primary reason I believe in life insurance for children. I can not imagine the grief I would experience if one of my children were to die. And returning to work would be the furthest thing from my mind. How long would it take before you could effectively return to work? A week? A month? Longer?

Would your employer, customers or clients give you the time you need to grieve? If so, at what cost? A life insurance policy on your children can offset the loss of income you would experience from an extended time away.

Family Help & Counseling

Even after the initial grief wanes, you and your family will likely want to seek counseling to help get through this difficult time. Sadly, not all health insurance policies provide adequate mental health benefits. It’s possible you will need to pay out-of-pocket for any ongoing counseling or therapy you or your loved one require. Life insurance policy proceeds can help cover the cost of such services.

And consider that grief counseling might be necessary for other children in the family. The Center for Grief Recovery and Therapeutic Services acknowledges that we still don’t know exactly how children grieve loss, but it can manifest in very different ways from parents. Having access to good counseling can help minimize lasting psychological issues.

A Children’s Term Life Insurance Rider May be the Answer

Genworth Life Insurance Company is one of the very few child life insurance companies that offer term life insurance policies for children. Most companies offer policies beginning at age 18. But you can purchase term life insurance for your children in the form of a rider on your policy from almost any company. A rider is simply additional coverage added to a policy to insure something other than the primary insured’s life. 

These riders vary slightly by the company, but they provide similar coverage at comparable costs. Here’s how ING ReliaStar Life’s child term rider works.

• Coverage Amount – $2,000 to $10,000
• Cost – $12.00 to $60.00 annually
• Cost covers all children regardless of the number
• Age Coverage Begins – 15 days
• Age Coverage Ends – 25 years
• Conversion to an individual permanent policy is available

The primary differences you’ll find are in cost and the coverage amount. For example, some companies offer child term riders up to $25,000. Another key point to note is that one rider will cover all children in the family. So a $60.00 child term rider would provide $10,000 coverage for each child, whether you have one or ten. Many riders will extend coverage to stepchildren and adopted children of the insured as well.

Term life insurance provides the best value in life insurance protection. Adding a children’s term life rider can add more even value and help you achieve a more well-rounded approach to protecting your loved ones.

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About Term Life Insurance Coverage for Children

As you consider investing in life insurance to cover your children, you’re likely sensitive to the potential premium costs. After all, raising a family isn’t inexpensive, and a high life insurance premium may not work well with your budget. Fortunately, most insurance companies that handle term life policies provide you with the option to purchase term life on your children in the form of a rider on your policy.

According to Bain, “A rider is simply additional coverage added to a policy to insure something other than the primary insured’s life. As an example, imagine adding a jewelry rider to a homeowner’s policy to insure expensive items beyond what the base policy provides. It’s the same concept with a children’s term rider.

These riders vary slightly by the company, but they provide similar coverage at comparable costs.”

Important to note is that one rider will cover all children in your family. So if you’re paying $60.00 for a $10,000 child term rider, the death benefit is $10,000 for each child, regardless of whether you have one, two, five, or even more children. Some riders extend coverage to adopted and stepchildren as well.

Preparation, not Premonition

Considering life insurance for your children doesn’t mean you’re expecting or willing the worst to happen to your loved ones; it simply means you care enough about your family to ensure you’re prepared for anything.

If you’d like to learn more about term life policies and child term riders for you and your loved ones, talk with a trusted professional who can answer all of your questions.

Buying Term Life Insurance for Your Children

It may seem strange to think about buying term life insurance for a child. After all, beyond the emotional loss, your family likely wouldn’t suffer from the loss of income, which is typically the reason people buy life insurance in the first place. Life insurance is designed to care for loved ones that depend on you once you are gone, it does not make sense to purchase a life insurance policy for a child. You don’t need life insurance for your children as they do not have dependents that need financial care once they are gone.

Death Expenses

Of course, there are some reasons to get your child life insurance. When considering purchasing such insurance for your children, think carefully about how their death could affect you financially. Consider expenses such as funeral costs and, depending on the age of the child, the possibility of having to take care of any unsettled debts. In this case, term life insurance for a child does make sense. Burying a child is unimaginable, but struggling to pay for the funeral would make it even more challenging.

Child Riders

Unfortunately, very few insurance companies offer separate policies for children. There are child riders, however, which many companies offer as an add-on to a parent’s insurance coverage. Typically parents can pay an additional flat fee and in the unfortunate event that their child died they could receive some coverage for these costs.

Can you get a life insurance policy on your child’s father? Yes. If you are not happy with plans and providers for a child plan, you can purchase life insurance for the child’s father and get a child life rider to cover your children. 

Case Studies: Exploring Life Insurance for Children

Case Study 1: Term Life Insurance for Children

Mary, a parent of a 4-year-old child, was considering buying life insurance for her daughter. After researching various options, she discovered that term life insurance for children is an affordable choice. She found a policy with $20,000 coverage at a monthly rate of about $7.08 from Genworth Life Insurance Company. Mary decided to purchase the policy to secure her child’s future.

Case Study 2: Children’s Term Life Rider

John, a parent with an existing life insurance policy, wanted to add coverage for his children. He opted for a children’s term life rider, which is an additional benefit added to his policy. John purchased a rider with $20,000 coverage at an annual rate of $120.00 from Protective Life Insurance Company. This rider provided coverage for all of his eligible children until a specific age, usually 23-25.

Case Study 3: Whole Life Insurance for Children

Sarah, a parent looking for permanent life coverage for her 10-year-old child, decided to explore whole life insurance options.

She found a popular whole life insurance policy from Gerber Life Insurance Company that offered $5,000 coverage at a monthly rate of $3.27, depending on the state. Sarah liked the features of the plan, such as coverage doubling at age 18, fixed premiums, and cash value accumulation.

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How to Buy Life Insurance for a Child: The Bottom Line

Life insurance policies for children are a type of investment designed to protect your family from unexpected life events while offering an opportunity to save for the future. 

However, insuring a child is not necessarily the best idea for everyone. A trusted agent can guide you through the advantages and disadvantages of insuring your child. 

In fact, sometimes, parental good intentions might be misguided. Before you consider coverage for your child, consider how comfortable you are with your own insurance? You should always prioritize having good coverage for yourself first. 

Learning how to buy life insurance for a child is an important step in protecting your family, but it’s a secondary step.  Why not get started by using our free quote tool below to get great child life insurance rates in seconds. 

References:

1. https://www.bls.gov/opub/ted/2017/the-rising-cost-of-dying-1986-2017.htm
2. https://www.griefcounselor.org/resources/grieving-children/

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