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 their lives without the stress of money. While children are not typically “breadwinners” for their family, there are few instances where life insurance for your child could be considered:
- To serve as a savings account
- To protect a child’s later insurability
- To pay for potential funeral expenses
- To provide financial stability for parents while they endure the loss of a child
Let’s explore what purchasing life insurance for your child means.
Life Insurance for Children Explained
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.
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.
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
While child life insurance can have its benefits, it’s important to also ensure the adults in your household have adequate life insurance coverage. Ensuring a dependent’s financial security is a good financial decision that can be passed down to generations of your family.
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.