Are you considering life insurance for a child?
In this guide, we’ll go over the best child life insurance plans, show you sample prices, and discuss why you should or should not buy coverage on a minor.
Topics Covered in this article
How Does Life Insurance For Children Work?
Life insurance for children is typically a whole life policy between $10,000 – $50,000 in coverage. A small portion of your monthly payment goes into an interest-bearing account called “cash value.” The equity that accumulates in the cash value account can be withdrawn and spent at any point in the child’s life.
Most child life policies don’t require an exam. Generally, you’re only required to answer a couple of questions about the children’s health.
Whole life policies are very straightforward. Here’s the fine print:
- Premiums can’t ever increase.
- The policy never expires at any age.
- Coverage can’t decrease.
- Builds cash value that you can withdraw anytime.
You can also get coverage on a minor via a children’s term insurance rider.
It’s helpful to remember that a children’s term rider does not mean the child has a policy. Their coverage would merely be an add-on to someone else’s policy.
If the other master policy should ever go inactive, so too would the coverage on the child.
Also, child term riders usually cease to provide coverage once the children become 18-25 (varies based on the company).
If you want life insurance for your child, it’s always best to buy a standalone policy, so you know they have guaranteed lifetime coverage.
Pros And Cons To Buying Life Insurance For A Minor
It’s truly a matter of preference whether you buy life coverage for your children.
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.
Pros
- 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 20’s or 30’s, the policy you purchased for them 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 very slim, it could happen. Having a life insurance policy on one of your little ones gives you perfect peace of mind. You can know 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. They can easily cost as much as $6,000.
- Savings fund: Full disclosure juvenile life insurance isn’t the best mechanism to save up money for your child’s future college expenses. All financial advisors agree on this. That said, you can use these plans to help save money for college or any other future expense. Because they are whole life insurance contracts, cash value accrues over time. Cash value in a whole life 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. Additionally, the cash value account usually earns interest each month, causing it to grow even more. The policy owner is entitled to withdraw funds from this cash value account and spend the money any way you desire.
- College loan protection: In 2019, the average college student graduated with $29,900 in student 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 very minimal. Buying coverage for a minor allows you to secure them a very low price that will never increase as they age.
Cons
- Low amounts of coverage: Most 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 whole life insurance plans do build cash value over time, but the amount is very 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 up money for a child, don’t seek out a children’s life insurance policy to do so.
- Very low 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.
How Much Does Children’s Whole Life Insurance Cost?
The exact amount you pay to insure a child depends on their age, the amount of coverage you purchase, and the insurance company you choose.
That said, the chart below shows the price of Mutual of Omaha’s children’s life insurance for various coverage amounts and ages.
| 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 |
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-$75,000 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) |
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 consent to a life insurance policy on them. Even life insurance for teenagers doesn’t need their consent.
As long as you’re a parent, grandparent, great grandparent, stepparent, or legal guardian, you can buy coverage on them without their knowledge.
No life insurance company requires children to consent to a life insurance policy on them. Even life insurance for teenagers doesn’t need their consent.
As long as you’re a parent, grandparent, great grandparent, stepparent, or legal guardian, you can buy coverage on them without their knowledge.
As a general rule, any chronic illness or disease will result in a decline.
There’s never a waiting period for life insurance on children. No matter what insurance company you’re looking at, the coverage begins right away. The only payout exclusion on a child policy is suicide during the first two years. All other causes of death will result in a total payout of the death benefit.
In most cases, insurance companies won’t insure children who are 18 and above. Since they’re adults, they want them to purchase their own coverage.
Children’s life insurance is a great way to guarantee their ability to buy coverage later in life while locking in very low premiums. If the unfortunate should happen where the child dies prematurely, the policy will provide a quick payout to cover funeral expenses. And if you bought enough coverage, it could also allow you to take some much-needed time off work.
Most life insurance companies will allow you to buy between $5,000- $50,000 in life insurance for minors.
Every insurance carrier is different regarding their minimum and maximum.
Not just anyone can buy a policy on a child. Life insurance companies will generally only allow the following people to purchase life insurance on a child:
- Parent
- Grandparent
- Great grandparent
- Stepparent
- Legal guardian
Keep in mind that adoptive parents are acceptable.
Here is another helpful fact to keep in mind. Grandparents can buy life insurance for grandchildren without receiving consent from the child’s parents.
Most life insurance companies will allow you to buy coverage on children 100% online. Generally, you can fully apply for up to $50,000 in whole life insurance coverage in less than 5 minutes without having to undergo a medical exam or provide medical records.
You will need to provide the following information about the children/grandchildren you’re insuring:
- Full name
- Date of birth
- Gender
- Answers to a couple of medical questions (vary by carrier)
Then you’ll have to provide the following information about the person purchasing the coverage:
- Full name
- Relationship to the insured kids
- Address
- Gender
- Date of birth
- SSN
- Phone number
- Beneficiary names
- Payment information
Once you fill out all the required information, the insurance company will process the application and mail you a paper policy that generally gets to you within a few weeks.
For the kids to qualify, you’ll just have to be able to say no to a few basic questions about the child’s health.
As long as the child or grandchild you’re insuring was not born with some kind of chronic illness, disease, or disorder, the insurance company will accept them.
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, it 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.