Buying Life Insurance for Children

A dad laughs with his son after learning more about how he can purchase a life insurance policy for his child

Life insurance is meant to ensure your family and loved ones who rely on your income can pay the bills, cover the cost of final expenses and continue living without the stress of money. While children are not typically “breadwinners” for their families, there are a few instances where life insurance for your child could be considered:

  • To serve as a savings account – Many life insurance policies for kids are permanent policies, meaning they have a cash value component that can slowly grow over time.
  • To protect a child’s later insurability – When you acquire life insurance for someone at a young age, it could set them up to find more coverage or insurance later in life easier.
  • To pay for potential funeral expenses – Just as life insurance for an adult can be used to cover end-of-life expenses, a life insurance policy for your child could do the same in the event of their passing.
  • To provide financial stability for parents while they endure the loss of a child – The last thing you want to worry about when your child passes away is bills and the everyday expenses of life. A life insurance policy can help ensure some of your financial needs are met while you’re given the space and time to grieve your loss.

Let’s explore what purchasing life insurance for your child means.

Life Insurance for Children Explained

1. Permanent Child Life Insurance Includes a Savings Account

Most life insurance policies for children are permanent policies, which include a savings account component (also known as a cash value) that grows slowly over time. A whole life insurance policy can be used as a set-it-and-forget it savings account, and it may make sense for your financial situation to use this kind of life insurance policy as a savings vehicle.

2. Life Insurance for Children Protects Them for Life

The intent for protecting your child’s insurability is that if a child is protected by a life insurance policy from an early age, before diagnosis of any potential pre-existing condition, he or she should be able to increase the amount of that policy once they have dependents. It’s good to remember, though, that the chances someone will not qualify for life insurance in his or her 20s or 30s is low.

3. Child Life Insurance Provides Financial Support

In the unfortunate event of losing a child, the additional financial support of a life insurance policy could help lessen your worry in an already trying time. A life insurance policy for your child can give you the space to grieve and process the loss without having to worry about the significant costs of losing a loved one.

Considering Life Insurance for Your Child vs. Family Life Insurance 

Ensuring a dependent’s financial security is a good financial decision that can be passed down to generations of your family. Introducing your child to life insurance and the benefits of it at a younger age can ensure they understand the importance of being covered as they get older. Additionally, life insurance for your children is an extra step of financial protection in the unfortunate event of their passing. 

While child life insurance can have its benefits, it’s important to also ensure the adults in your household have adequate life insurance coverage. Family life insurance combines two types of life insurance (term and whole) to cover members of a family in a single policy. The policyholder is typically a parent in the family and is covered by a whole life policy, while the children and any spouses or domestic partners are covered by term policies

Not sure which type is best for you? Our team of licensed insurance agents will take the time to get to know your family and find the right coverage to meet your needs and budget.

Learn more about your options for life insurance with SelectQuote

Whether you need help determining what kind of child life insurance you need, or what adequate coverage looks like for your family, our team of licensed insurance agents can help you consider all of your available options. In just minutes, we can compare coverage and rates from some of the most trusted insurance companies in the nation.

We do the shopping. You do the saving.