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Best Life Insurance For Children

Child life insurance is typically a whole life policy with a cash value account that grows in value as your child grows older. A child life rider can be added to an existing term or permanent life insurance policy to provide life insurance for a child. Many companies offer child life insurance policies, but if you're looking for the most affordable option, we recommend starting your search with Mutual of Omaha, which has the best rates among the insurers we've looked at.

Should I buy whole life insurance for my child?

Child whole life insurance can be used to save money, provide guaranteed insurability if your child becomes ill, and cover final burial expenses for your children. These insurance policies can be purchased at any stage of a child's life, from infancy to adolescence.

A child whole life policy can be a good investment if you are concerned that your child will become ill or disabled and want to ensure their ability to purchase life insurance when they are older. There may be better ways to provide financial security for your children, and we do not recommend a child policy as a savings vehicle.

Child whole life as a savings product

Child and juvenile life insurance is primarily marketed as a savings vehicle, with companies emphasizing that your child can use the policy's cash value for future expenses such as college. When you pay your premiums, a portion of your money is deposited into the policy's cash value account, which has a guaranteed interest rate, allowing your savings to grow over time.

However, whole life insurance has a number of fees that can reduce that rate of return, and only a small portion of the premium is allocated to the policy cash value each month. If you want to invest money for your child's education or future, we recommend a savings account, such as a 529 plan. These have lower fees and can provide more financial assistance to your children.

Guaranteed insurability

Another reason you should consider child life insurance is that it protects your child's insurability for the rest of their life. If a child develops medical problems or becomes disabled before the age of 18, it may be difficult for them to qualify for life insurance coverage as an adult. By purchasing life insurance for your child, you will provide some coverage for the child while also securing his or her ability to purchase additional coverage later in life, which can be critical if they are disabled. If your child is in good health, however, purchasing child life insurance may not be necessary, as most young adults have no trouble obtaining life insurance coverage.

Final expenses

If your child dies, the death benefit of child life insurance could be used to cover their funeral expenses. Because the chances of a child dying are extremely low, we would recommend establishing an emergency fund to cover expenses in the event of a crisis. This option provides more flexibility because the funds can be used for a variety of emergency expenses.

However, if your family would be unable to save enough to cover burial costs if one of your children died — funeral costs typically range from $1,000 to $3,000 — a child life insurance policy may be worth considering. However, we recommend first investigating what assistance your state and county provide to cover final expenses.

Should I buy a child rider on life insurance?

If you already have term or permanent life insurance, a child rider can be added to your existing policy for an additional monthly premium and provides similar coverage to a separate child life insurance policy. Although some insurance providers require a medical questionnaire to determine eligibility and pricing, the juvenile would not be required to undergo a medical exam. Furthermore, the rider covers all current and future children in your family for the same monthly cost.

• When compared to a traditional child whole life policy, the rider is significantly less expensive, owing in part to the absence of a cash value account. Furthermore, if your children become ill, some life insurance companies will allow the child rider to be converted to a standard child whole life policy, allowing you to lock in your children's insurability. The new policy face value, on the other hand, is typically limited to five times the original amount. For these reasons, we recommend purchasing the child life rider over individual policies for your children if you are looking to buy insurance coverage for them.

Coverage details for child term riders from the largest life insurance companies are provided below. It is worth noting that almost every life insurer provides a child rider that can be added to a term life insurance policy.

The monthly costs are based on a $10,000 child life insurance rider.

Best child life insurance companies

If you want to buy a child whole life insurance policy on its own, the best insurer will usually be the cheapest — most companies offer the same whole life benefits and policy features.

We recommend starting your search with Mutual of Omaha, as it has the lowest rates among the insurers we looked at. However, assuming you already have coverage, an even cheaper option would be to add a child rider to your own life insurance policy — child riders are available from almost every life insurance provider.