A juvenile life insurance policy is a great way to give your little ones a head start.
But there are pros and cons to consider.
Learn how these plans work, the cost, reasons to buy, qualification requirements, and the best companies.
Topics Covered in this article
How Does Juvenile Life Insurance Work?
A juvenile life insurance policy is a permanent life insurance plan that insures a child’s life.
Typically, it’s a whole life insurance policy, but some companies offer universal life for minors.
With whole life insurance, premiums are guaranteed never to increase, the death benefit won’t decrease, and it will last the child’s entire life.
Face amounts are typically less than $100,000 with most companies.
It’s possible to get more than $100k for a juvenile, but you’ll have to meet additional underwriting requirements and speak with an insurance agent.
It also includes a savings feature called “cash value” that will accrue equity tax-deferred.
With each payment, the policy builds additional cash value, which the policyholder can withdraw at any time.
You can use the policy’s cash value to help pay for college expenses or anything else.
Another way to insure a juvenile would be via a “children’s term life insurance rider.”
In this circumstance, you would buy a life insurance plan (you’re the insured) and then add the child rider to cover one of your kids or grandkids.
A child rider will generally only insure the life of the child until they are 18-25.
If your policy should ever terminate (you die or cancel it), their coverage via the rider also ends.
If the child should pass away while the policy is active and in good standing, the insurance company will pay out the death benefit.
Death benefit payouts are always tax-free and paid in cash directly to the beneficiary.
| Underwriting Requirements | $0-$100,000 | $100,001-$1,000,000 |
|---|---|---|
| Medical exam | No | No |
| Answer questions about heatlh | Yes | Yes |
| Extensive questions about medical history | No | Yes |
| Medical records subpoenaed | No | Yes |
| Typical approval time | Instantly | 2-3 weeks |
| Can buy online without talking to an agent | $0-$50K: Yes $50K+: No | No |
| Sufficient owner's income* | No | <$250K: No >$250K: Yes |
| Owner's own life insurance** | No | Yes |
**High coverage amounts typically require that the policy owner has at least double the coverage they seek for the child.
How Much Does A Juvenile Whole Life Insurance Policy Cost?
The cost of juvenile policies is usually $20-$35 monthly for a $50,000 whole life plan. All life insurance quotes are based on the applicant’s exact age, gender, and how much you want.
Below is a table that shows the monthly cost for $10,000-$50,000 in coverage from Mutual of Omaha.
| AGE | $10,000 | $20,000 | $30,000 | $50,000 |
|---|---|---|---|---|
| 0-4 | $4.61 | $8.21 | $11.82 | $19.03 |
| 5-9 | $5.43 | $9.86 | $14.29 | $23.16 |
| 10-14 | $6.15 | $11.30 | $16.44 | $26.74 |
| 15-17 | $7.75 | $14.49 | $21.24 | $34.74 |
The monthly prices in the table below are for much higher whole life insurance amounts. You’ll be subject to more stringent underwriting to qualify for these high limits, and you must speak with an agent.
Depending on how much you want, you may need to meet specific income requirements and provide copies of all your child’s medical records.
| AGE | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 1 | M: $48.74 F: $39.29 | M: $112.39 F: $88.77 | M: $216.30 F: $169.49 | M: $426.30 F: $332.68 |
| 5 | M: $56.70 F: $45.24 | M: $132.30 F: $103.64 | M: $255.68 F: $199.24 | M: $505.05 F: $392.18 |
| 10 | M: $68.25 F: $53.38 | M: $161.18 F: $123.99 | M: $312.99 F: $239.49 | M: $619.68 F: $472.68 |
| 15 | M: $81.38 F: $62.39 | M: $193.99 F: $146.52 | M: $378.18 F: $284.11 | M: $750.05 F: $561.93 |
The Five Best Juvenile Life Insurance Companies
We assessed over 15 life insurance companies to determine which were in the top five.
We considered the following factors: The financial strength of the insurer, ease of application, the cost, coverage limits, complaint history, and both optional and included riders.
| Rank | Insurance Company | Coverage & New Applicant Age Limits | Policy Type, Length Price Changes Cash Value Growth | Company History & Financial Ratings |
|---|---|---|---|---|
| 1 |  | Coverage: $5,000-$50,000 Age Range: 0-17 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value Brochure | Company founding date: 1909 A.M. Best Rating: A+ (Superior) |
| 2 |  | Coverage: $10,000-$50,000 Age Range: 0-14 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value Brochure | Company founding date: 1967 A.M. Best Rating: A (Excellent) |
| 3 |  | Coverage: $5,000-$30,000 Age Range: 0-24 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value | Company founding date: 1951 A.M. Best Rating: A (Excellent) |
| 4 |  | Coverage: $5,000-$1,000,000 Age Range: 0-17 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value Brochure | Company founding date: 1874 A.M. Best Rating: A (Excellent) |
| 5 |  | Coverage: $1,000-$50,000 Age Range: 0-17 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value | Company founding date: 1904 A.M. Best Rating: A (Excellent) |
Is Juvenile Life Insurance Worth Buying?
Life insurance coverage for a minor at a young age is a great way to give them a head start on their financial future.
Truthfully, financial planning professionals rarely agree about whether or not insuring a child is worth it.
In the end, it’s a subjective decision and one that you must make.
That said, below are the most common reasons why buying life insurance for a child makes sense.
- Extremely low life insurance rates that are locked in for life.
- Their future insurability is secure because child policies include a guaranteed option to buy additional coverage later in life.
- Builds cash value that can be used at any point for anything.
- Peace of mind knowing that their final expenses won’t be a financial burden if the worst should happen. In addition, the death benefit payout is usually large enough to allow grieving loved ones to take much-needed time away from work.
Regardless of why you’re considering a juvenile policy, it’s best to talk to an advisor who can answer all your questions and help you make an informed decision.
Qualification Requirements
All policies for minors are underwritten and subject to medical underwriting conditions.
To begin with, no child will have to endure a medical exam.
If you want less than $100,000 in coverage, all you’ll have to do is answer 2-3 health questions.
For more than $100,000, you’ll need to answer dozens of questions about your child’s medical history, and the insurer will likely request their medical records.
Things such as broken bones or other physical injuries are no concern to life insurance companies.
If your child has any medical conditions, it’s advised that you begin by speaking with an agent.
A quick conversation with an agent can give you a clear understanding of whether or not your child will qualify.
Who Is Allowed To Buy Life Insurance For A Juvenile?
Only parents, step-parents, legal guardians, grandparents, and great-grandparents are eligible to buy life insurance for minors.
For example, without legal guardianship, an uncle could not buy life insurance for his niece or nephew.
Only the aforementioned parties can buy child life insurance.
Frequently Asked Questions
All whole life policies build cash value. That’s true whether the policy is for a minor or an adult.
A juvenile life policy is typically a whole life policy that parents, grandparents, or legal guardians can buy to insure the child’s life. The prices remain the same, and the coverage is guaranteed never to decrease or expire. It also features a savings component called cash value that will accrue equity. Your child can use the equity in the policy later in life to help pay for significant life events such as college.
There are three primary cons to children’s life insurance. First, there is a slim chance of the death benefit paying out since children dying at a young age is so rare. Second, the cash value buildup is meager, given that premiums are so low. Finally, most child policies have low coverage options. If you want high coverage amounts, not many insurers offer that to children.
There are never any restrictions on how the proceeds are spent. You can pay for funeral costs, medical bills, debts, or literally anything else you want.
You can buy multiple policies for your kids from many different insurers. No law says otherwise. The only time buying numerous policies may be an issue is when you want very high coverage amounts (above $100,000). For example, if you have $100,000 with ABC company, XYZ company will take that into consideration when they determine how much coverage they’ll offer you.
All life insurance products have exclusions and limitations. For a juvenile policy, there will be no payout of the death benefit during the first two years for suicide or if the child is murdered.
Once the insured child turns 18, some insurers require that they become the owner, and some do not. For example, the Gerber Grow-Up Plan automatically transfers ownership to the child once they reach age 21. All insurance products from each carrier have different rules and stipulations. Be sure to ask your insurer what their stance is on this issue.