Life insurance for children

No parent wants to even consider the possibility that a child in their family could fall ill or die. However, if you found yourself in this situation, you’d want to be able to get the best possible care for your child, or take some time off to heal. Life insurance for children can help with that.

What is child life insurance?

Child life insurance pays out if your child dies or is diagnosed with a serious illness. This can help pay for specialist treatment or support you financially while you take time off work.

It can also help pay for funeral costs should the worst happen.

Why would I need life insurance for my child?

If your child falls ill with a serious condition, it is likely you would want to take time off work to look after them. Child life insurance can help provide an alternative income while you do this. It can also pay for medical treatment not covered by the NHS, if there’s an alternative available.

If your child dies, their life insurance can help pay for the funeral and give you some financial breathing space as you take time to grieve.

Does my child have to have their own life insurance policy?

No, usually parents take out life insurance for themselves and add their children to that. You can find separate life insurance policies for children, but this might be a more expensive route to take.

What are the benefits of child life insurance?

The cover will vary by provider, but life insurance for children usually pays out a lump sum in case your child dies from an illness or as a result of an accident.

Some policies offer critical illness cover, where payment is made in case your child is diagnosed with a serious illness.

What restrictions are there?

This varies by provider and cover level, but some insurers may restrict the age of children who can be covered.

Existing medical conditions and death by suicide might also be excluded.

What kind of life insurance can children get?

There are three kinds of life insurance you can get for your child:
• “Rider” insurance. Rider insurance is when you add your child to your own life insurance policy. The cover would usually be similar to what is offered to you, though some differences may apply. Critical illness cover may not always be included as standard, but you should be able to add it to the policy.
• Term life insurance for children. Term life is a good option if your child is too old to be added to your policy. You will pay a monthly premium to cover your child for a set time period (usually around 5–10 years) or until they reach adulthood.
• Life assurance. This type of cover stays with your child into adulthood and covers them throughout their life. Sometimes known as “baby insurance” or “baby life insurance”, this is an expensive option which not many people choose to take out. The benefit here is that your child will be covered even if they develop a condition later in life.

Can I add my child onto my life insurance policy?

Yes, this is what most parents choose to do. Depending on your child’s age, this might not add much to your premiums.

How much does life insurance for children cost?

This depends on the provider and your personal circumstances.

Elements that affect the cost of life insurance include:

• Your age and your child’s age
• How much cover you want
• How long you want cover for
• Your medical history

Depending on your child’s age, adding them to your existing life insurance policy may not make it much more expensive, if at all. Some providers also offer free life insurance for parents of children under a certain age.

Should I take out a life insurance policy for my child?

This is your decision, but it’s worth considering. One thing to think about is whether you could afford to take time off work if something happens to your child and whether you could pay for extra treatment if needed.

If the insurance premiums is very low, it could be worth it. Otherwise, you might want to consider alternative options.

What are the alternatives to child life insurance?

As your child is unlikely to have any debts, the insurance payment in case they die is really for the parent. This can be helpful if you want to take time off work to deal with what’s happened.

Depending on how much life insurance for your child costs, you might be better off putting this money into a savings account and using that if you need to.

For critical illness cover, you can get private health insurance for your child, though this might not pay out enough to replace your income if you decide to take time off work to care for your child while they’re ill.

The best thing to do is get prices for both life and health insurance for your child and compare this with the option of simply putting the money away in a savings account every month.

Note that, if you simply want your child to be looked after if anything happens to you, getting life insurance for yourself should take care of that. You can also take out a family income benefit, which helps your family with their monthly outgoings, like rent and groceries, if you die.

How do I choose the best life insurance policy for my child?

The best way to do this is to consider your child’s age and whether they are prone to any particular illness.

If you have your own existing life insurance policy, look at whether you can add your child to that and how much it would cost in the first instance.

For older children, term life insurance might be more suitable.

If you can afford to get life assurance for your child, this can provide them with cover for the rest of their life. It’s expensive though, which is why not many choose to take this type of cover out.

Frequently asked questions

• Can I cover more than one child?

  Yes, some insurers offer policies that can include more than one child and pay out a lump sum for each. Make sure you check for cover exclusions with the insurance company before you apply.

• Does child life insurance pay out more than once?

  It can do. If your policy includes both you and your child, it may pay out once for your child and once for you.

  Life insurance doesn’t usually pay out more than once for the same person.