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Life insurance for children

You can insure your kids at an early age — but it's not always a sound investment.

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Name Product Issue age Minimum Coverage Maximum Coverage Term Lengths Medical Exam Required
Sproutt
18 - 60 years old
$50,000
$4,000,000
5, 10, 15, 20, 25 and 30 years
No
Compare 40+ insurers and apply online to get the lowest possible price — no medical exam required.
Nationwide life insurance
18 - 80 years old
$25,000
$10,000,000
10, 15, 20 and 30 years
Yes
Get term, whole, universal or no-exam life insurance with up to $1 million in coverage.
Quotacy
18 - 80 years old
$50,000
$65,000,000
10, 15, 20, 30 and 40 years
Depends on provider and policy
Score the lowest rate on life insurance by comparing no obligation quotes from 14+ companies online. No contact info, no spamming.
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A life insurance policy can cover your kids when they’re little and provide protection throughout their life. Since most parents don’t rely on their children financially, it’s often an unnecessary expense — and a 529 plan might be a better option. But, if you’re looking to lock in cheap rates for your kids while they’re young and healthy, opting in now might be the right choice.

What is life insurance for kids?

A life insurance policy for children works just like it does for adults. You can choose to get coverage on your biological children, adoptive children, stepchildren or any child you have legal guardianship over. If your child dies while insured, their beneficiary receives a payout from the insurance company. There are two main types of life insurance for children.

Whole life insurance for kids

Most policies marketed for children are whole life policies. These offer lifelong coverage and build cash value over time, and your children may have the option to take over payments or choose a new beneficiary at certain ages like 18 or 21. Most policies come with a low coverage amount such as $50,000 or less and your premiums stay the same over time. Most major insurers sell whole life insurance for children, and some — like Gerber — specialize in the product.

Child term rider

You can add this rider to your own term life insurance policy to protect your children. Also known as a child protection rider, it pays out a death benefit if your child dies prematurely. It can cover multiple children under the same flat fee, and the coverage is usually capped at small amounts between $1,000 and $25,000. Typically, you can add this rider to your policy when your child is between 15 days and 18 years old.

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Should I buy life insurance for my child?

It depends. Most parents only consider a policy if their children are sick, are the breadwinner of the family or to lock in cheap rates for their future. If you determine you want the extra financial protection on your child’s, you’ll want to be sure you’ve considered your own life insurance needs first, especially if your family depends on your income. Then, take a look at your budget and decide if you’d rather buy a stand-alone permanent life insurance policy that offers more coverage for a longer period of time or a cheaper term life rider that offers less coverage.

5 reasons to consider child life insurance

If you’re trying to decide if a policy makes sense for your family, consider these benefits:

  • Future protection. As long as the premiums are paid, a permanent life insurance policy stays active into your child’s adulthood. So, even if your child is sick or chooses a risky career, they’ll have protection without having to take a medical exam or risk being denied due to health problems or career choice. But for most healthy children, this isn’t necessary – and it can be an expensive guarantee.
  • Secures premiums for the future.Taking out a permanent life insurance policy can ensure that your child will not only have a policy in the future but at the same premium rate, instead of higher costs due to health problems or age.
  • Potential savings. If you choose a policy that accumulates cash value, you can borrow against it to pay for school or other future needs. But you’ll need to pay the money back to preserve the death benefit, and there are less expensive and less risky savings products you could use instead.
  • Burial expenses. In the event of the child’s death, the coverage pays out benefits that can be used for end-of-life costs.
  • Income during bereavement. A policy could supplement income if your child dies, and you need to take time away from work during the grieving process.

Protecting your child’s insurability

This is industry-speak for making sure your child will always be able to get life insurance. Unless your child has a health condition that will make it harder for them to buy coverage as an adult, you don’t need to worry about protecting their insurability. What’s more, young, healthy adults in their 20s and 30s can often access cheap life insurance rates.

However, if you have a family history of genetic illnesses that develop throughout childhood, you might want to purchase a policy for your child now. That way, you can lock in coverage for their entire life without them having to take a medical exam.

Pros and cons

Determine if the benefits outweigh the drawbacks to decide if purchasing a child life policy, or child term rider is right for your family.

Pros

  • May cover multiple children. Depending on the insurance company, you may be able to secure coverage for multiple children.
  • No medical exam. Your child likely won’t have to take a medical exam to get coverage.
  • Conversion to a permanent plan. Some insurers allow for the child’s life coverage to convert to a permanent plan once your term child protection rider ends or the child reaches a certain age.
  • Savings opportunity. Similar to conversion, insurance companies may offer the ability to use the rider as a type of savings for college in the event that the plan is outlived.
  • Inexpensive costs. If you purchase a child term rider, it’s generally an inexpensive addition to your monthly premium. Depending on how many children you want to cover and which coverage amount you choose you could see rates as low as an extra $2.00 per month for a child term rider on group coverage.

Cons

  • Value. The college-savings component doesn’t usually include any sort of interest, so it may not be the best savings account investment.
  • Coverage amounts. You’ll likely only find small coverage amounts, usually up to $50,000. Your child may be able to purchase additional coverage after a certain age, but that depends on the insurer.
  • Age restrictions. You may be faced with an age restriction for either yourself or your child. Check with each company you’re comparing to confirm what the minimum and maximum age requirements are.
  • Eligibility. Though there are often no medical exams, it’s important to carefully read over any underwriting criteria and speak with the insurer to confirm your child’s eligibility.

How childcare costs factor into your life insurance

Is permanent life insurance a good investment for a child?

If you have multiple savings accounts and investments for your child, a whole or universal life insurance policy that accumulates cash value can be a great way to supplement their investment portfolio. But it’s usually not the best idea for the first or main way to invest money for their future.

Life insurance tends to have higher administrative costs than other investment avenues, which eats into your returns. You also don’t control how your money is invested, so you don’t have the power to change investment strategies as the market changes.

What are alternatives to life insurance for my child?

Life insurance isn’t the only way to help your child financially or build a contingency fund. You can start investing for your child’s future with a:

  • 529 savings plan. A 529 plan is an account that allows you to save for your child’s education costs. The account is tax-advantaged and has an age limit, but funds can be used for qualifying education expenditures. Tuition, dorm costs and supplies are just a few costs that you may be able to use the funds for.
  • Private tuition plan. Similar to a 529, certain private institutions offer savings plans for education costs.
  • High-interest savings account. When you’re looking to save for more than just the cost of your child’s schooling, it may suit you to look into a high-interest savings account.
  • Certificate of deposit (CD). A CD is a low-risk investment that can offer higher returns than a traditional savings account, particularly if you can commit to not touching it for several years or more.

Bottom line

Buying life insurance for your child is a huge decision, and you likely won’t have an answer right off the bat. As with the rest of life insurance, there are many moving parts to consider before you make a decision. Take your time and compare life insurers to figure out what fits your family’s needs best.

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