Life Insurance for Children
Way.com: The Better Way to Shop for Life Insurance
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Way.com: The Better Way to Shop for Life Insurance
No Medical Exams
100% Online
Get estimates in seconds
4.9/5 Rating on the App Store
Key Takeaways
Children's life insurance may not be for everyone. Like every other insurance, its sole aim is to provide a safety net to the children and their future in addition to providing death benefits in the event they pass away. Parents or guardians purchase children's life insurance for their children.
Therefore, what makes it different from the standard policies is that life insurance for children is that the policyholder is not the person who purchases the policy. In other words, children's life insurance is purchased by someone else for children.
Children's life insurance is not considered very necessary due to the lower probability of the event of death due to their age. However, if you are considering buying an insurance policy for your child, then the procedure is the same; regular premium payments and the benefits in return.
When it comes to the type of life insurance one buys for their children, it is usually whole life insurance. Even though term life insurance can be purchased, the specific nature of the policy about time makes it not a popular choice regarding children's life insurance. However, whole life insurance will provide coverage for the entire life, along with the perks of the cash value that can be used when the child is alive. If you are sticking to term life insurance due to its affordability, add a rider to cover the children until a particular age and choose to convert to a permanent policy with an additional amount.
When it comes to insurance for children, one must look at the policy options that cater to the requirements of the children. For example, a convertible children's term rider, living benefits, and policies that are eligible for dividends can make life insurance for children an asset and investment.
Regarding policies, you have to choose the type of life insurance policy that best suits your needs and budget. However, when it comes to which company to choose, you can choose it based on financial strength, frequency of complaints, customer service, and the regularity in payouts.
Here are the best life insurance companies that offer the best life insurance for children.
| Insurance Company | Policy Types | Credit Card Purchase | AM Best Rating |
|---|---|---|---|
| Protective | Indexed Universal (IUL), Term, Universal (UL), Variable Universal (VUL), Whole | Yes | A+ |
| Nationwide | Final Expense, Indexed Universal (IUL), Term, Universal (UL), Variable Universal (VUL), Whole | Yes | A+ |
| Mutual of Omaha | Final Expense, Indexed Universal (IUL), Term, Universal (UL) | Yes | A+ |
| Penn Mutual | Term, Universal (UL), Variable Universal (VUL), Whole | Yes | A+ |
The cost of insuring a child varies depending on several factors, such as the type of policy, the coverage amount, the child's age and health, and the insurance company. The child's age and health may also influence the cost of insuring a child. Younger, healthier children typically have lower premiums, considered lower risk. However, if a child has a pre-existing medical condition, the premium may be higher, or the child may be considered ineligible for coverage.
| Age | The monthly cost of $100,000 whole life |
|---|---|
| 0 | $50 |
| 15 | $77 |
| 30 | $133 |
| Age | The monthly cost of $100,000 whole life |
|---|---|
| 0 | $44 |
| 15 | $65 |
| 30 | $102 |
Buying children's life insurance may not be the right decision for every family. However, if you are in the situations mentioned below, you may consider buying life insurance.
Children's life insurance can provide a death benefit to cover funeral expenses, outstanding medical bills, and other debts if a child passes away unexpectedly. This can be especially important for families who don’t have the financial resources to cover these expenses independently.
Parents can lock in their child's insurance at a young age by purchasing a children's life insurance policy. This means that even if the child develops a medical condition later in life, they will still be eligible for coverage as long as premiums are paid.
If you opt for a permanent life insurance policy for your child, it will include a cash value component. In that case, a portion of each premium payment goes towards building up a savings account that can be accessed in the future. This can be a way for parents to save for major expenses, such as college tuition or a down payment on a home.
It is a known fact that children's life insurance is not an absolutely necessary financial asset. Therefore, if you are unsure whether to buy life insurance for your child, then the following checklist might help.
If a family is struggling financially, spending money on a children's life insurance policy may not make sense. The premiums for these policies can be relatively low, but they still represent an additional expense that may not be necessary.
Other financial priorities may be more important than purchasing a children's life insurance policy. For example, if a family is focused on saving for retirement or paying off debt, they may allocate their financial resources toward those goals instead.
If you do not find a children's life insurance policy's lower death benefits worth it, you need not opt for it.
| Pros | Cons |
|---|---|
| Insurability Guarantee Your child will be covered if a health condition occurs later. Similarly, it allows the purchase of additional riders and other policies without a medical examination. |
Lower return rate Even though there is a cash value component if you purchase a permanent policy, the return rate might not be as much as what you would receive in a college savings plan. |
| Lower premium payment The younger the policyholder, the lower the premium rates. Therefore, it allows you to lock in premium rates that are lower than the ones for older policyholders. |
Lower and limited coverage The coverage limits of child insurance might not be sufficient for their needs as an adult |
| Cash value Component Since it is common to purchase whole or other permanent insurance for children, there is the possibility of a cash value component that can accumulate over time. |
Unnecessary expense Without significant financial resources, a child insurance policy might seem like money spent on premiums could be used for other financial priorities, such as saving for college or paying off debt. In addition, it is a long-term expense. |
| Limited benefits Since the likelihood of a child passing away is relatively low, some families may view the benefits of children's life insurance as limited. |
Children often become eligible for coverage at 14 or 15 days old. Once that amount is reached, you can purchase insurance for your child or grandchild at any time up until they turn 18 years old. The minimum age varies between insurers.
The life insurance rates published in this guide are based on the results of research completed by Way.com’s data team. Using a mix of public and internal data, we analyzed millions of rate averages across U.S. ZIP codes.
Quotes are typically based on a full coverage policy average unless otherwise noted within the content.
These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes will differ. Given this, it’s important to go through our insurance steps form to find how much you can save with way.com
If you are a legal guardian, parent, or grandparent, you can buy a life insurance policy for your child online, directly, or through an agent.
This will depend on your specific financial goals and needs. Generally, life insurance policies for children are purchased shortly after birth once they reach 14 days or during their early years. Since there is no medical examination involved, purchasing a policy for your child can be a quicker process.
Parents might consider purchasing life insurance for their children early to lock in lower premiums. Life insurance premiums are often based on age and health, so purchasing a policy when your child is young and healthy can help secure a lower premium rate.
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