Life Insurance For Children

In a typical life insurance scenario, a new parent secures a policy to guarantee their family’s financial stability in case of their demise.

With life insurance, the family can settle their mortgage, cover debts, meet regular expenses, and even fund a child’s college education if one of the breadwinners is absent.

In this setup, the parent is the policyholder, and the child is the policy beneficiary.

However, an alternative scenario exists where the child becomes the policyholder, and the parent becomes the beneficiary.

Though less common, obtaining life insurance for children, even an infant, can assist in covering end-of-life expenses in the unfortunate event of the child’s unexpected death.

It can also initiate savings that the child can access later in life and provide coverage if they become uninsurable due to health or other reasons.

an image illustration of Life Insurance For Children
Life Insurance For Children

Let us delve into exploring Life Insurance For Children

What is Child Life Insurance and How Does It Work?

There are two methods for obtaining life insurance for children: a standalone policy or adding the child to an adult’s existing policy.

In this case, a parent, grandparent, or guardian purchases a life insurance policy in the child’s name, typically a permanent policy like whole life. This policy remains effective throughout the child’s life and includes a cash value feature that becomes accessible as the child grows older. Death benefits are usually modest, often capped at $50,000. The responsible party pays premiums until the child reaches a specific age (typically 18 or 21), after which the child takes over premium payments.

  • Rider on an Adult’s Policy

Some insurers permit adding a child to an existing term life insurance policy owned by an adult. Ownership transfers to the adult child upon reaching adulthood, with an option to convert to a permanent life policy, provided premiums are paid on time.

Pros of Child Life Insurance

  1. End-of-Life Expense Coverage: Provides financial support for medical and funeral expenses in the unfortunate event of a child’s death.
  2. Lifetime Coverage Assurance: Ensures a child has coverage, even if they face challenges obtaining insurance as adults due to health or occupation.
  3. Locked-In Low Premiums: Purchasing insurance for a child secures lower premiums due to their age, maintaining cost advantages into adulthood.
  4. Cash Value Access: Permanent life insurance allows the child to access cash value for various purposes as they grow older.

Cons of Child Life Insurance

  1. Limited Coverage Amounts: Insurers typically limit coverage for a child to around $50,000, which may be insufficient in adulthood.
  2. Low Returns on Cash Value: The cash value in whole life insurance offers modest returns, potentially lagging behind inflation.
  3. Ongoing Premium Payments: Premiums must be consistently paid for the policy to remain active, posing a potential challenge in the future.

Cost of Child Life Insurance

According to Choice Mutual, monthly costs for a children’s life insurance policy from Mutual of Omaha are as follows:

Age $10,000 $20,000 $30,000 $50,000
0-4 $4.61 $8.22 $11.82 $19.04
5-9 $5.43 $9.87 $14.30 $23.17
10-14 $6.15 $11.30 $16.45 $26.75
15-17 $7.75 $14.50 $21.25 $34.75

Premiums vary by company, and this is provided as an example. Consult an independent agent or financial advisor for personalized advice.

Companies Offering Child Life Insurance

  • Aflac: Whole life coverage with the option to convert to an individual policy at age 25.
  • American Family: Whole life coverage with a maximum of $75,000.
  • Gerber Life: Whole life coverage with a $50,000 benefit doubling at age 18.
  • Mutual of Omaha: Whole life coverage for ages 14 days to 17 years, with a maximum of $50,000.

Alternatives to Child Life Insurance

Discussing needs with a financial advisor is crucial, and alternative options include:

  • 529 accounts
  • custodial accounts
  • standard investment accounts.

While not a top consideration for many parents or grandparents, buying life insurance for a child provides advantages such as locking in low premiums and ensuring coverage for future uninsurability.

However, individual circumstances and alternatives should be discussed with a financial advisor to make the best decision for the child in question.


1. What is children’s life insurance, and why is it important?

Children life insurance provides coverage for unexpected events. It’s crucial for financial security and offers unique advantages, ensuring a child’s well-being.

2. How does children’s life insurance work?

It operates either as a standalone policy or by adding a child to an adult’s existing policy. Payments may be made until the child reaches adulthood, securing coverage for a lifetime.

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