Tips for Buying Life Insurance on Children

Purchasing a life insurance policy is an awesome way to invest in the future of your family, because you know that, as long as you pay the premiums, your dependents will be able to take care of important financial bills because you took the step to buy protection. You have several people that rely on your income, and you would leave a massive amount of debt and final expenses to your family is something tragic were to happen to you.

While there are many people who believe that only those who have others depending on them financially should own life insurance, there are others who feel that there are solid arguments for having coverage on others as well – including children.

There are, in fact, several good reasons for placing at least some amount of life insurance coverage on a child. First and foremost, while there is no amount of money that could ever replace such a devastating loss, the financial consequences that come with this type of situation could at least be eased with this financial planning vehicle.

Why Consider Placing Life Insurance Coverage On A Child

When considering the placement of life insurance coverage on a child, there are many good reasons for doing so. One such argument is that this coverage can help in paying for the high cost of final expenses.

Today, the average cost of a funeral is approximately $10,000. Because the death of a child is typically unexpected, most people would be unprepared for these types of costs, and would likely need to dip into savings or place the expenses on high interest credit cards – essentially putting themselves into a very tough financial situation down the road.

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Having a life insurance policy already in place can help in avoiding this situation – as well as with the future financial consequences of having to rebuild savings or pay off credit card debt later on.

Placing life insurance on a child can also help in ensuring that the child will have coverage when he or she gets older. This can be especially beneficial if they were to contract an adverse health condition later in their life and would only be able to qualify for life insurance coverage with no medical exam and have to in turn pay much higher premium rates.

The Right Type Of Coverage To Purchase

When considering the purchase of life insurance for a child, there are a number of different policy options to choose from. As with young adults or senior adult life insurance coverage, children can be insured via either term or permanent policies.

Term coverage will remain in force for a set number of years, while permanent coverage will remain in force for the rest of the child’s life, provided that the premium is paid. Therefore, because the premium will likely start out so low, it may be beneficial to consider a permanent plan. Permanent coverage will also allow the child to build up a substantial amount of savings in the cash value component of the policy over time.

If purchasing a permanent life insurance policy, the savings in the cash value portion of the policy can also be used for funding future goals such as college savings. Because of the tax deferred growth, funds could essentially compound and grow to a substantial amount by the time a child is ready to enter college.

Rather than purchasing a stand-alone policy, there are other ways to obtain life insurance coverage on a child as well. One option is to add an additional insured rider to the life insurance policy of the child’s parent.

These additional plans are going to be purchased as a rider on a policy that you already own, either for yourself or for your spouse. Getting the add-on coverage is a great way to get coverage for your children without having to add a massive premium to your budget.

There are some disadvantages to these riders that you should be aware of before you add a rider to your life insurance policy. These riders are only going to give your child a small amount of additional coverage. They won’t give anywhere near what a traditional life insurance plan will, but since your children won’t have any debts or paychecks to replace, a rider should give the perfect amount of life insurance protection.

There are some life insurance policies that allow the policy owner to add another individual to the policy through a policy rider. Adding this rider is oftentimes less expensive and more affordable than buying a separate policy. There are also child insurance riders available that can be added to policies of a parent. These usually allow coverage on the child of up to $25,000 until he or she reaches the age of 18.

Considerations When Shopping For Life Insurance On A Child

If shopping for life insurance coverage on a child, there are several important criteria to keep in mind. First, if a term life insurance policy is purchased on the child, it is essential to find out whether or not the insurer will allow that policy to be converted over to a permanent policy in the future. This will allow the child to continue his or her coverage protection indefinitely.

Also, regardless of what type of policy is purchased, it is also important to find out if the insurer will allow the child to purchase additional amounts of coverage without having to provide evidence of insurability. This, too, can help the child to increase his or her coverage if their needs increase over time.

Purchasing life insurance coverage on a child can be a wise choice for both coverage protection and long term savings needs.  The type of policy that you choose should be based on both short and long term anticipated needs as well – and it should also be able to grow and be customized as the child’s needs and financial goals change over time.

If you decide that a life insurance policy for your children, there are several different alternatives to pick from. A lot of insurance professionals say that life insurance plans for your kids are a waste of money, but that doesn’t mean that you should discount these plans automatically.

If you don’t want to purchase additional life insurance coverage for your children, options are available to you in other forms of investments, but one of the simplest is to put the money into a separate savings account. Instead of paying the monthly premiums on the life insurance plan, you can put that money into a bank account or even invest it into a low-risk investment, and in the event of a sad situation you will have the money that you need to pay any funeral expenses or final costs that you encounter.

The reason that the majority of life insurance experts suggest avoiding these plans is because the chances of every getting the payout from the plan is slim. More than likely, nothing tragic is going to happen to your child, which means that you aren’t going to get any benefit for paying all those premiums.

Each family is different, and everyone wants different insurance coverage for their family. There are dozens of different factors that you’ll need to consider when you’re getting life insurance coverage. If you decide that you want to get a life insurance plan for your family, our agents can help you do that.

Each insurance company is going to show you wildly contrasting rates, because the all have different medical underwriting and requirements. If you want to ensure that you’re getting the best plan for your child’s life insurance policy, you’ll need to get quotes from all of the companies available. Which is why our independent agents play a vital role in your search.

We know that nobody wants to think about something tragic happens, but it’s one of the most important decisions and conversations that you can have with your family. Life insurance is some of the best insurance policies that you can buy for your family. Without life insurance, either for yourself or for your children, is one of the worst mistakes that you can make.

If something tragic were to happen, you and your loved ones would be responsible for paying off all of the final expenses, which further makes this situation more burdensom. Having adequate life insurance coverage will give you and your family the resources that you need to pay off any final expenses and avoid a mountain of debt.

If extra concerns come to your mind about any of the different policies that you can choose from such as how to get insurance with pre existing conditions or if you need quotes from high risk companies, please reach out to our advisors. Their knowledge is waiting to be shared and their main goal is to find the perfect plan for you and your family.


Susan Wright, CLU, ChFC, RHU, REBC, ADPA, CITRMS, CIPA has been in the insurance and financial field for over 27 years. Even with years of experience, she continues to create new resources for others. Everything from books to training material.

Susan received her MBA from St. Louis University and her BA from Michigan State University.

She has worked in several areas but excels in writing material for both finances and insurance. Her goal is to give professionals credibility and assist in streamlining the sales process.

She has written countless articles for a variety of websites.

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