Depending on your goals, buying children’s life insurance may or may not be a good idea.
To help you make the right decision, we’ll discuss the pros and cons and the policy options available to children.
We’ll also discuss how much it costs, the best companies, and why some parents choose to insure their kids.
Topics Covered in this article
How Does Life Insurance For Children Work?
Children’s life insurance is permanent coverage that is usually whole life insurance. However, it can be a universal life policy too, which usually has a slightly lower premium than whole life.
You can also insure a minor via a child rider. With a children’s term life insurance rider, the insured children do not have their own policy.
They are merely an add-on benefit attached to another adult’s policy.
The coverage from a child rider typically does not last their entire life. The rider typically expires when the child reaches age 18-25.
Whether it’s children’s whole life insurance or universal life, a small portion of your premium payments go into an interest-bearing account called “cash value.”
The equity that accumulates in the cash value account can be withdrawn by the policyholder and spent on anything.
A whole life insurance policy will offer ironclad guarantees that premiums and the death benefit will never change or expire.
If it’s a universal life policy, the premiums and coverage typically never change as well. Both types offer lifelong financial protection with no expiration date.
If the child passes away, the insurance company will pay out a tax-free cash payment to the beneficiaries.
| 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.
8 Best Whole Life Insurance Companies For Kids
The table below outlines the best life insurance companies for minors. We analyzed over 15 different companies to select the top 8.
We considered the financial strength of the company, cost of the insurance, ease of application, available riders, and complaint history.
| 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: $10,000-$49,000 Age Range: 0-17 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value Brochure | Company founding date: 1895 A.M. Best Rating: A (Excellent) |
| 6 |  | 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) |
| 7 |  | Coverage: $10,000-$35,000 Age Range: 0-17 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value | Company founding date: 1910 A.M. Best Rating: A (Excellent) |
| 8 |  | Coverage: $10,000-$30,000 Age Range: 0-17 | Whole Life Insurance Lasts forever once issued Prices never increase Builds cash value | Company founding date: 1958 A.M. Best Rating: A (Excellent) |
How Much Does Children’s Whole Life Insurance Cost?
Life insurance rates for a child depend on their age, the amount of coverage, the type of policy, and the insurance company you choose.
That said, the chart below shows the monthly cost of Mutual of Omaha’s children’s life insurance for various coverage amounts and ages.
Mutual of Omaha charges the same price for males and females.
| 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 life insurance quotes below (monthly premiums) for higher death benefit amounts will likely come with additional underwriting requirements.
| 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 |
Pros And Cons Of Buying Life Insurance For A Minor
Whether you buy life coverage for your children is truly a matter of preference.
No hard and fast rule says yes, you should, or no, you shouldn’t. It’s all about what you think is best.
Below is a breakdown of the pros and cons.
The good
- Future insurability: One of the many benefits of whole life insurance for children is getting guaranteed coverage later in life. The insurance company will allow the insured child to purchase more coverage (up to a certain amount) without showing evidence of insurability. That means their health or lifestyle cannot prevent them from getting coverage. If your child were to develop cancer in their 20s or 30s, the policy you purchased would entitle them to buy additional coverage. Their cancer would not prevent them from obtaining additional insurance.
- Funeral costs: Funeral expenses are the most prominent and popular reason parents and grandparents purchase a child’s life insurance policy. Although a child’s chances of dying are slim, it does, unfortunately, happen. Life insurance coverage for your children provides peace of mind knowing their funeral expenses wouldn’t create a financial hardship. After all, an average burial in the USA costs around $10,000. Cremations aren’t cheap, either. A cremation costs as much as $6,000.
- Savings plan: Full disclosure, juvenile life insurance isn’t the best way to save money for your child’s future college expenses. All financial advisors agree on this. That said, you can use these plans as a college savings account or for any other reason. Because they are permanent life insurance contracts, cash value accrues over time. Cash value in a permanent life insurance policy is like a behind-the-scenes savings account. Every time you make a payment, a percentage of the revenue goes into the cash value account. Plus, it usually earns interest, causing it to grow even more. The policy owner is entitled to withdraw funds from this account and spend the money in any way.
- College loan protection: In 2022, the average college student owes $37,358 in federal loans. Also, 14% of parents took out (which means they owe the debt) roughly $37,200 in federal college loans. If the child passes away with these loans, they must still be paid back. A child’s life insurance policy can ensure these debts are quickly paid if the child dies while these loans are outstanding.
- Locked-in low prices: The cost to insure a child’s life is minimal. Buying coverage for a minor at a young age allows you to secure a very low price that will never increase as they age.
The bad
- Low amounts of coverage: Most (not all) children’s life insurance plans only offer a meager amount of coverage. It’s typically less than $100,000 in protection. Most adults need high amounts of coverage ($500,000+) to ensure they can replace their income or pay off large debts such as a mortgage. After they are grown, a policy worth $25,000 or $50,000 will do little to cover their life insurance needs as an adult.
- The worst mechanism for saving money: If your goal is to build up some cash to help your child or grandchild later in life, life insurance isn’t the best tool. Yes, children’s life insurance plans build cash value over time, but the amount is minimal. Even if 100% of your premiums were to go into the cash-value account (it’s closer to 50%), it’s still only going to amass to a few thousand dollars at best. If you want to save money for a child, don’t seek a children’s life insurance policy to do so.
- Meager chance of payout: According to the CDC, the chance of children 1-4 years dying is 23.3 per 100,000 (0.233%). For children 5-14 years, it’s 13.4 per 100,000 (0.0134%). Even though the cost to insure them is meager, the statistics make it a questionable buy.
Should You Buy Life Insurance For Kids?
Here are the most common reasons why some parents and grandparents choose to insure a minor:
- Low rates that will never increase.
- Tax-deferred cash growth.
- Guaranteed insurability later in life.
- The death benefit can pay for final expenses and allow for time off work should the child pass away prematurely.
It’s wise to speak with a qualified insurance agent who can assess all your needs and goals to recommend the best insurance products for your children and loved ones.
Who Is Eligible To Buy Life Insurance For A Minor?
Not just anyone can buy a policy on a child.
Life insurance companies will generally only allow the following people to purchase life insurance for a child:
- Parent
- Grandparent
- Great grandparent
- Stepparent
- Legal guardian
Keep in mind that adoptive parents are acceptable.
It’s worth noting that grandparents can buy life insurance for grandchildren without receiving consent from the child’s parents.
Frequently Asked Questions
Many life insurance companies offer life insurance for a child. It will generally be a whole life insurance policy that is permanent coverage with a cash value savings component.
No life insurance company requires children to participate in the application process. Even life insurance for teenagers nearing adulthood won’t require their involvement.
As long as you’re a parent, grandparent, great-grandparent, stepparent, or legal guardian, you can buy coverage on them without their knowledge or participation.
Children with pre-existing medical conditions can still qualify for life insurance. It just depends on the nature of their health issues. Some medical conditions are insurable, and some are not.
There’s never a waiting period for children’s life insurance. With all insurance companies, the coverage begins immediately. The only payout exclusions on a child policy are suicide, fraud or murder. All other causes of death will result in a total payout of the death benefit.
In most cases, 17 is the maximum age insurance companies offer child policies.
Most life insurance companies will allow you to buy up to $50,000 in life insurance for minors online without having to talk with someone. For coverage above $50K, you must speak with a licensed insurance advisor.
Most life insurance companies only require the child to be 14 days or older before you can insure them.
The Gerber Grow Up Plan is absolutely a worthwhile investment. If your children or grandchildren were to pass away, Gerber Life would provide a quick cash payout to cover their funeral costs. However, if you want to insure a child, other companies such as Mutual of Omaha or Globe Life provide the same coverage at a much lower rate.